UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q


☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended		~~September~~June 30, ~~2021~~2022
OR
☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


Commission File Number	Exact Name of Registrant as Specified in its Charter, Principal Executive Office Address and Telephone Number					State of Incorporation	I.R.S. Employer Identification No.
001-37665	HERTZ GLOBAL HOLDINGS, INC					Delaware	61-1770902
	8501 Williams Road,		Estero,	Florida	33928
	(239)	301-7000

001-07541	THE HERTZ CORPORATION					Delaware	13-1938568
	8501 Williams Road,		Estero,	Florida	33928
	(239)	301-7000

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol(s)

Name of each exchange on which Registered

Hertz Global Holdings, Inc.

Common Stock

~~par~~Par value $0.01 per share

~~HTZZ~~HTZ

Nasdaq Global Select

Hertz Global Holdings, Inc.

*Warrants to purchase common stock

Each exercisable for one share of Hertz Global Holdings, Inc. common stock at an exercise price of $13.80 per share, subject to adjustment

HTZWW

Nasdaq Global Select

The Hertz Corporation

None

*Hertz Global Holdings, Inc.'s common stock trades on the over-the-counter market under the symbol HTZZ.

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Hertz Global Holdings, Inc. Yes ☒ No ☐

The Hertz Corporation Yes ☒☐ No ☐☒

1(Note: As a voluntary filer, The Hertz Corporation is not subject to the filing requirements of Section 13 or 15(d) of the Exchange Act. The Hertz Corporation has filed all reports pursuant to Section 13 or 15(d) of the Exchange Act during the preceding 12 months as if it was subject to such filing requirements.)

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

Hertz Global Holdings, Inc. Yes ☒ No ☐

The Hertz Corporation Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company" and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Hertz Global Holdings, Inc.

Large accelerated filer

☐☒

Accelerated filer

☒☐

Non-accelerated filer

☐

Smaller reporting company

☐

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

☐

The Hertz Corporation

Large accelerated filer

☐

Accelerated filer

☐

Non-accelerated filer

☒

Smaller reporting company

☐

Emerging growth company

☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Hertz Global Holdings, Inc. Yes ☐ No ☒

The Hertz Corporation Yes ☐ No ☒

Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court.

~~Hertz Global Holdings, Inc. Yes~~ ☒ No ☐

~~The Hertz Corporation~~ Yes ☒ No ☐

Indicate the number of shares outstanding of each of the registrant's classes of common stock, as of the latest practicable date.

Class

Shares Outstanding as of

~~October~~July 21, ~~2021~~2022

Hertz Global Holdings, Inc.

Common Stock,

par value $0.01 per share

~~472,688,295~~360,326,081

The Hertz Corporation(1)

Common Stock,

par value $0.01 per share

100

(1)(100% owned by

Rental Car Intermediate Holdings, LLC)

Table of Contents

HERTZ GLOBAL HOLDINGS, INC. AND SUBSIDIARIES

THE HERTZ CORPORATION AND SUBSIDIARIES

TABLE OF CONTENTS

Table of Contents

HERTZ GLOBAL HOLDINGS, INC. AND SUBSIDIARIES

THE HERTZ CORPORATION AND SUBSIDIARIES

PART I. FINANCIAL INFORMATION

ITEM 1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

Index


		Page
Hertz Global Holdings, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets as of ~~September~~June 30, ~~2021~~2022 and December 31, ~~2020~~2021		2
Condensed Consolidated Statements of Operations for the Three and ~~Nine~~Six Months Ended ~~September~~June 30, ~~2021~~2022 and ~~2020~~2021		3
Condensed Consolidated Statements of Comprehensive Income (Loss) for the Three and ~~Nine~~Six Months Ended ~~September~~June 30, ~~2021~~2022 and ~~2020~~2021		4
Condensed Consolidated Statements of Changes in ~~Mezzanine Equity and~~ Stockholders' Equity for the Three and ~~Nine~~ Six Months Ended ~~September~~June 30, ~~2021~~2022 and ~~2020~~2021		5
Condensed Consolidated Statements of Cash Flows for the ~~Nine~~Six Months Ended ~~September~~June 30, ~~2021~~2022 and ~~2020~~2021		6
The Hertz Corporation and Subsidiaries
Condensed Consolidated Balance Sheets as of ~~September~~June 30, ~~2021~~2022 and December 31, ~~2020~~2021		89
Condensed Consolidated Statements of Operations for the Three and ~~Nine~~Six Months Ended ~~September~~June 30, ~~2021~~2022 and ~~2020~~2021		910
Condensed Consolidated Statements of Comprehensive Income (Loss) for the Three and ~~Nine~~Six Months Ended ~~September~~June 30, ~~2021~~2022 and ~~2020~~2021		1011
Condensed Consolidated Statements of Changes in Stockholder's Equity (Deficit) for the Three and ~~Nine~~Six Months Ended ~~September~~June 30, ~~2021~~2022 and ~~2020~~2021		1112
Condensed Consolidated Statements of Cash Flows for the ~~Nine~~Six Months Ended ~~September~~June 30, ~~2021~~2022 and ~~2020~~2021		1213
Notes to the Condensed Consolidated Financial Statements
Note 1	Background	1415
Note 2	Basis of Presentation ~~and Recently Issued Accounting Pronouncements~~	1615


Note 3	Divestitures	1816
Note 4	Revenue Earning Vehicles	1816

Note 5	~~Goodwill and Intangible Assets, Net~~Debt	1817
Note 6	~~Debt~~Leases	1922

Note 7	~~Leases~~	29
~~Note 8~~	~~Restructuring~~	30
~~Note 9~~	Income Tax (Provision) Benefit	3122
Note 8	Public Warrants, Equity and Earnings (Loss) Per Common Share – Hertz Global	23


Note 9	Stock-Based Compensation	25
Note 10	~~Equity, Mezzan~~i ~~ne Equity~~ ~~and Earnings (Loss) Per Share – Hertz Global~~Financial Instruments	3226
Note 11	~~Public Warrants – Hertz Global~~	35

~~Note 12~~	~~Stock-Based Compensation~~	36
~~Note 13~~	Fair Value Measurements	3627
Note 1412	Contingencies and Off-Balance Sheet Commitments	3829
Note 1513	Related Party Transactions	4031
Note 1614	Segment Information	41

~~Note 17~~	~~Liabilities Subject to Compromise~~	46
~~Note 18~~	~~Reorganization Items, Net~~	4631


Note 15	Reorganization Items, Net	34

Table of Contents

HERTZ GLOBAL HOLDINGS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

Unaudited

(In millions, except par value and share data)


		September 30, 2021		December 31, 2020			June 30, 2022		December 31, 2021
ASSETS	ASSETS					ASSETS
Cash and cash equivalents	Cash and cash equivalents	$	2,703	$	1,096	Cash and cash equivalents	$	1,041	$	2,258
Restricted cash and cash equivalents:	Restricted cash and cash equivalents:					Restricted cash and cash equivalents:
Vehicle	Vehicle	320		50		Vehicle	221		77
Non-vehicle	Non-vehicle	443		361		Non-vehicle	301		316
Total restricted cash and cash equivalents	Total restricted cash and cash equivalents	763		411		Total restricted cash and cash equivalents	522		393
Total cash, cash equivalents, restricted cash and restricted cash equivalents		3,466		1,507
Total cash and cash equivalents and restricted cash and cash equivalents						Total cash and cash equivalents and restricted cash and cash equivalents	1,563		2,651
Receivables:	Receivables:					Receivables:
Vehicle	Vehicle	139		164		Vehicle	136		62
Non-vehicle, net of allowance of $58 and $46, respectively		751		613
Non-vehicle, net of allowance of $42 and $48, respectively						Non-vehicle, net of allowance of $42 and $48, respectively	839		696
Total receivables, net	Total receivables, net	890		777		Total receivables, net	975		758
Prepaid expenses and other assets	Prepaid expenses and other assets	642		373		Prepaid expenses and other assets	1,094		1,017
Revenue earning vehicles:	Revenue earning vehicles:					Revenue earning vehicles:
Vehicles	Vehicles	10,122		7,540		Vehicles	13,962		10,836
Less: accumulated depreciation	Less: accumulated depreciation	(1,559)		(1,478)		Less: accumulated depreciation	(1,632)		(1,610)
Total revenue earning vehicles, net	Total revenue earning vehicles, net	8,563		6,062		Total revenue earning vehicles, net	12,330		9,226
Property and equipment, net	Property and equipment, net	609		666		Property and equipment, net	605		608
Operating lease right-of-use assets	Operating lease right-of-use assets	1,453		1,675		Operating lease right-of-use assets	1,562		1,566
Intangible assets, net	Intangible assets, net	2,925		2,992		Intangible assets, net	2,893		2,912
Goodwill	Goodwill	1,045		1,045		Goodwill	1,044		1,045
Assets held for sale		—		1,811

Total assets~~(a)~~(1)	Total assets~~(a)~~(1)	$	19,593	$	16,908	Total assets~~(a)~~(1)	$	22,066	$	19,783
LIABILITIES, MEZZANINE EQUITY AND STOCKHOLDERS' EQUITY
LIABILITIES AND STOCKHOLDERS' EQUITY						LIABILITIES AND STOCKHOLDERS' EQUITY
Accounts payable:	Accounts payable:					Accounts payable:
Vehicle	Vehicle	$	46	$	29	Vehicle	$	182	$	56
Non-vehicle	Non-vehicle	540		389		Non-vehicle	477		516
Total accounts payable	Total accounts payable	586		418		Total accounts payable	659		572
Accrued liabilities	Accrued liabilities	904		759		Accrued liabilities	1,048		863
Accrued taxes, net	Accrued taxes, net	228		121		Accrued taxes, net	206		157
Debt:	Debt:					Debt:
Vehicle	Vehicle	7,207		6,024		Vehicle	10,411		7,921
Non-vehicle	Non-vehicle	1,511		243		Non-vehicle	2,981		2,986
Total debt	Total debt	8,718		6,267		Total debt	13,392		10,907
Public Warrants	Public Warrants	783		—		Public Warrants	811		1,324
Operating lease liabilities	Operating lease liabilities	1,402		1,636		Operating lease liabilities	1,493		1,510
Self-insured liabilities	Self-insured liabilities	470		488		Self-insured liabilities	470		463
Deferred income taxes, net	Deferred income taxes, net	851		730		Deferred income taxes, net	1,258		1,010
Total liabilities not subject to compromise		13,942		10,419
Liabilities subject to compromise		—		4,965
Liabilities held for sale		—		1,431

Total liabilities~~(a)~~(1)	Total liabilities~~(a)~~(1)	13,942		16,815		Total liabilities~~(a)~~(1)	19,337		16,806
Commitments and contingencies	Commitments and contingencies	0		0		Commitments and contingencies	0		0
Mezzanine Equity:
Preferred stock, $0.01 par value, 1,500,000 shares issued and outstanding at September 30, 2021		1,433		—
Total mezzanine equity		1,433		—

Stockholders' equity:	Stockholders' equity:					Stockholders' equity:
Preferred stock, $0.01 par value, 0 shares issued and outstanding at December 31, 2020		—		—
Common stock, $0.01 par value, 471,528,459 shares issued and outstanding at September 30, 2021, and 158,235,410 and 156,206,478 shares issued and outstanding at December 31, 2020		5		2
Treasury stock, at cost, 2,028,932 shares at December 31, 2020		—		(100)
Preferred stock, $0.01 par value, 0 shares issued and outstanding						Preferred stock, $0.01 par value, 0 shares issued and outstanding	—		—
Common stock, $0.01 par value, 477,722,177 and 477,233,278 shares issued, respectively, and 368,386,372 and 449,782,424 shares outstanding, respectively						Common stock, $0.01 par value, 477,722,177 and 477,233,278 shares issued, respectively, and 368,386,372 and 449,782,424 shares outstanding, respectively	5		5
Treasury stock, at cost, 109,335,805 and 27,450,854 common shares, respectively						Treasury stock, at cost, 109,335,805 and 27,450,854 common shares, respectively	(2,321)		(708)
Additional paid-in capital	Additional paid-in capital	6,482		3,047		Additional paid-in capital	6,274		6,209
Retained earnings (Accumulated deficit)	Retained earnings (Accumulated deficit)	(2,055)		(2,681)		Retained earnings (Accumulated deficit)	(949)		(2,315)
Accumulated other comprehensive income (loss)	Accumulated other comprehensive income (loss)	(226)		(212)		Accumulated other comprehensive income (loss)	(280)		(214)
Stockholders' equity attributable to Hertz Global		4,206		56
Noncontrolling interests		12		37

Total stockholders' equity	Total stockholders' equity	4,218		93		Total stockholders' equity	2,729		2,977
Total liabilities, mezzanine equity and stockholders' equity		$	19,593	$	16,908
Total liabilities and stockholders' equity						Total liabilities and stockholders' equity	$	22,066	$	19,783

~~(a)~~(1) Hertz Global Holdings, Inc.'s consolidated total assets as of ~~September~~June 30, ~~2021~~2022 and December 31, ~~2020~~2021 include total assets of variable interest entities (“VIEs”) of ~~$745~~$838 million and ~~$511~~$734 million, respectively, which can only be used to settle obligations of the VIEs. Hertz Global Holdings, Inc.'s consolidated total liabilities as of ~~September~~June 30, ~~2021~~2022 and December 31, ~~2020~~2021 include total liabilities of VIEs of ~~$734~~$837 million and ~~$475~~$733 million, respectively, for which the creditors of the VIEs have no recourse to Hertz Global Holdings, Inc. See "Pledges Related to Vehicle ~~Financing "~~Financing" in Note 6,5, "Debt,~~" and "767 Auto Leasing LLC" in Note 15, "Related Party Transactions,~~" for further information.

The accompanying notes are an integral part of these financial statements.

Table of Contents

HERTZ GLOBAL HOLDINGS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

Unaudited

(In millions, except per share data)

Three Months Ended
September 30, Nine Months Ended
September 30,
2021 2020 2021 2020
Revenues $ 2,226 $ 1,268 $ 5,387 $ 4,023
Expenses:
Direct vehicle and operating 1,131 779 2,855 2,624
Depreciation of revenue earning vehicles and lease charges 61 347 420 1,632
Non-vehicle depreciation and amortization 49 58 153 168
Selling, general and administrative 177 138 498 506
Interest expense, net:
Vehicle 41 110 243 360
Non-vehicle (excludes contractual interest of $53 million and $75 million for the three and nine months ended September 30, 2020, respectively) 22 17 157 118
Total interest expense, net 63 127 400 478
Technology-related intangible and other asset impairments — — — 193
Other (income) expense, net (7) — (20) (15)
Reorganization items, net — 78 677 101
(Gain) from the sale of a business — — (400) —
Change in fair value of Public Warrants (16) — (16) —
Total expenses 1,458 1,527 4,567 5,687
Income (loss) before income taxes 768 (259) 820 (1,664)
Income tax (provision) benefit (160) 36 (193) 232
Net income (loss) 608 (223) 627 (1,432)
Net (income) loss attributable to noncontrolling interests (3) 1 (1) 7
Net income (loss) attributable to Hertz Global 605 (222) 626 (1,425)
Dividends on Series A Preferred Stock (34) — (34) —
Net income (loss) available to Hertz Global common stockholders $ 571 $ (222) $ 592 $ (1,425)
Weighted-average common shares outstanding:
Basic 471 156 264 148
Diluted 490 156 270 148
Earnings (loss) per common share:
Basic $ 1.21 $ (1.42) $ 2.25 $ (9.65)
Diluted $ 1.13 $ (1.42) $ 2.14 $ (9.65)



	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021



Revenues	$	2,344	$	1,873	$	4,154	$	3,161
Expenses:
Direct vehicle and operating	1,199		946		2,252		1,724
Depreciation of revenue earning vehicles and lease charges, net	106		116		47		359
Non-vehicle depreciation and amortization	36		50		69		104
Selling, general and administrative	257		172		492		321
Interest expense, net:
Vehicle	45		98		50		202
Non-vehicle	41		91		80		135
Total interest expense, net	86		189		130		337

Other (income) expense, net	2		(10)		—		(13)
Reorganization items, net	—		633		—		677
(Gain) from the sale of a business	—		(8)		—		(400)
Change in fair value of Public Warrants	(461)		—		(511)		—
Total expenses	1,225		2,088		2,479		3,109
Income (loss) before income taxes	1,119		(215)		1,675		52
Income tax (provision) benefit	(179)		46		(309)		(33)
Net income (loss)	940		(169)		1,366		19
Net (income) loss attributable to noncontrolling interests	—		1		—		2
Net income (loss) attributable to Hertz Global	$	940	$	(168)	$	1,366	$	21



Weighted-average common shares outstanding:
Basic	398		160		415		158
Diluted	424		160		443		158
Earnings (loss) per common share:
Basic	$	2.36	$	(1.05)	$	3.29	$	0.13
Diluted	$	1.13	$	(1.05)	$	1.93	$	0.13

The accompanying notes are an integral part of these financial statements.

Table of Contents

HERTZ GLOBAL HOLDINGS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

Unaudited

(In millions)


		Three Months Ended September 30,				Nine Months Ended September 30,					Three Months Ended June 30,				Six Months Ended June 30,
		2021		2020		2021		2020			2022		2021		2022		2021
Net income (loss)	Net income (loss)	$	608	$	(223)	$	627	$	(1,432)	Net income (loss)	$	940	$	(169)	$	1,366	$	19
Other comprehensive income (loss):	Other comprehensive income (loss):									Other comprehensive income (loss):
Foreign currency translation adjustments	Foreign currency translation adjustments	(24)		(6)		(14)		(32)		Foreign currency translation adjustments	(59)		(7)		(66)		10
Net gain (loss) on pension and postretirement benefit plans		—		15		—		1
Reclassification from other comprehensive income (loss) to other (income) expense for amortization of actuarial net losses		—		1		—		6

Total other comprehensive income (loss) before income taxes		(24)		10		(14)		(25)
Income tax (provision) benefit related to pension and postretirement benefit plans		—		(4)		—		—
Income tax (provision) benefit related to reclassified amounts of net periodic costs on pension and postretirement benefit plans		—		(1)		—		(2)

Total other comprehensive income (loss)	Total other comprehensive income (loss)	(24)		5		(14)		(27)		Total other comprehensive income (loss)	(59)		(7)		(66)		10
Total comprehensive income (loss)	Total comprehensive income (loss)	584		(218)		613		(1,459)		Total comprehensive income (loss)	881		(176)		1,300		29
Comprehensive (income) loss attributable to noncontrolling interests	Comprehensive (income) loss attributable to noncontrolling interests	(3)		1		(1)		7		Comprehensive (income) loss attributable to noncontrolling interests	—		1		—		2
Comprehensive income (loss) attributable to Hertz Global	Comprehensive income (loss) attributable to Hertz Global	$	581	$	(217)	$	612	$	(1,452)	Comprehensive income (loss) attributable to Hertz Global	$	881	$	(175)	$	1,300	$	31

The accompanying notes are an integral part of these financial statements.

Table of Contents

HERTZ GLOBAL HOLDINGS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN ~~MEZZANINE EQUITY AND~~ STOCKHOLDERS' EQUITY

Unaudited

(In millions)

Preferred Stock
Shares Preferred Stock
Amount Common Stock Shares Common Stock Amount Additional
Paid-In Capital Accumulated
Deficit Accumulated
Other
Comprehensive
Income (Loss) Treasury Stock Shares Treasury Stock Amount Stockholders'
Equity
Attributable to
Hertz Global Non-
controlling Interests Total Stockholders' Equity
Balance as of:
December 31, 2019 — $ — 142 $ 1 $ 3,024 $ (967) $ (189) 2 $ (100) $ 1,769 $ 119 $ 1,888
Net income (loss) — — — — — (356) — — — (356) (1) (357)
Other comprehensive income (loss) — — — — — — (39) — — (39) — (39)
Net settlement on vesting of restricted stock — — — — (2) — — — — (2) — (2)
Contributions from noncontrolling interests — — — — — — — — — — 1 1
March 31, 2020 — — 142 1 3,022 (1,323) (228) 2 (100) 1,372 119 1,491
Net income (loss) — — — — — (847) — — — (847) (5) (852)
Other comprehensive income (loss) — — — — — — 7 — — 7 — 7
Stock-based compensation charges — — — — (2) — — — — (2) — (2)
Stock issuance, net — — 14 1 28 — — — — 29 — 29
June 30, 2020 — — 156 2 3,048 (2,170) (221) 2 (100) 559 114 673
Net income (loss) — — — — — (222) — — — (222) (1) (223)
Other comprehensive income (loss) — — — — — — 5 — — 5 — 5
Net settlement on vesting of restricted stock — — — — (1) — — — — (1) — (1)
Distributions to noncontrolling interests — — — — — — — — — — (54) (54)
September 30, 2020 — $ — 156 $ 2 $ 3,047 $ (2,392) $ (216) 2 $ (100) $ 341 $ 59 $ 400

~~HERTZ GLOBAL HOLDINGS, INC. AND SUBSIDIARIES~~

~~CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN MEZZANINE EQUITY AND STOCKHOLDERS' EQUITY~~

~~Unaudited~~

~~(In millions)~~

Mezzanine Equity
Preferred Stock
Shares Preferred Stock
Amount Common Stock Shares Common Stock Amount Additional
Paid-In Capital
Retained Earnings (Accumulated
Deficit)(1)
Accumulated
Other
Comprehensive
Income (Loss) Treasury Stock Shares Treasury Stock Amount Stockholders'
Equity
Attributable to
Hertz Global Non-
controlling Interests Total Stockholders' Equity
Balance as of:
December 31, 2020 — $ — 156 $ 2 $ 3,047 $ (2,681) $ (212) 2 $ (100) $ 56 $ 37 $ 93
Net income (loss) — — — — — 190 — — — 190 (1) 189
Other comprehensive income (loss) — — — — — — 17 — — 17 — 17
Stock-based compensation charges — — — — 2 — — — — 2 — 2
Distributions to noncontrolling interests — — — — — — — — — — (11) (11)
March 31, 2021 — — 156 2 3,049 (2,491) (195) 2 (100) 265 25 290
Net income (loss) — — — — — (168) — — — (168) (1) (169)
Other comprehensive income (loss) — — — — — — (7) — — (7) — (7)
Cancellation of common and treasury shares in exchange for new common shares — — (142) (2) (98) — — (2) 100 — — —
Cancellation of stock-based awards — — — — (10) — — — — (10) — (10)
Distributions to common stockholders — — — — (239) — — — — (239) — (239)
Contribution from Plan Sponsors — — 277 3 2,778 — — — — 2,781 — 2,781
Rights Offering, net — — 180 2 1,796 — — — — 1,798 — 1,798
Public Warrants issuance — — — — (800) — — — — (800) — (800)
Preferred stock issuance, net 2 1,433 — — — — — — — — — —
Distributions to non-controlling interests, net — — — — — — — — — — (5) (5)
June 30, 2021 2 1,433 471 5 6,476 (2,659) (202) — — 3,620 19 3,639
Net income (loss) — — — — — 604 — — — 604 3 607
Other comprehensive income (loss) — — — — — — (24) — — (24) — (24)
Rights Offering, net — — 1 — 4 — — — — 4 — 4
Exercise of Public Warrants — — — — 2 — — — — 2 — 2
Distributions to noncontrolling interests — — — — — — — — — — (10) (10)
September 30, 2021 2 $ 1,433 472 $ 5 $ 6,482 $ (2,055) $ (226) — $ — $ 4,206 $ 12 $ 4,218


	Preferred Stock Shares	Preferred Stock Amount		Common Stock Shares	Common Stock Amount		Additional Paid-In Capital		Accumulated Deficit(1)		Accumulated Other Comprehensive Income (Loss)		Treasury Stock Shares	Treasury Stock Amount		Stockholders' Equity Attributable to Hertz Global		Non- controlling Interests(2)		Total Stockholders' Equity
Balance as of:
December 31, 2020	—	$	—	156	$	2	$	3,047	$	(2,681)	$	(212)	2	$	(100)	$	56	$	37	$	93
Net income (loss)	—	—		—	—		—		190		—		—	—		190		(1)		189
Other comprehensive income (loss)	—	—		—	—		—		—		17		—	—		17		—		17

Stock-based compensation charges	—	—		—	—		2		—		—		—	—		2		—		2
Distributions to noncontrolling interests	—	—		—	—		—		—		—		—	—		—		(11)		(11)
March 31, 2021	—	—		156	2		3,049		(2,491)		(195)		2	(100)		265		25		290
Net income (loss)	—	—		—	—		—		(168)		—		—	—		(168)		(1)		(169)
Other comprehensive income (loss)	—	—		—	—		—		—		(7)		—	—		(7)		—		(7)

Cancellation of common and treasury shares in exchange for new common shares	—	—		(142)	(2)		(98)		—		—		(2)	100		—		—		—
Cancellation of stock-based awards	—	—		—	—		(10)		—		—		—	—		(10)		—		(10)
Distributions to common stockholders	—	—		—	—		(239)		—		—		—	—		(239)		—		(239)
Contribution from Plan Sponsors	—	—		277	3		2,778		—		—		—	—		2,781		—		2,781
Rights Offering, net	—	—		180	2		1,796		—		—		—	—		1,798		—		1,798
Public Warrants issuance	—	—		—	—		(800)		—		—		—	—		(800)		—		(800)
Preferred stock issuance, net	2	1,433		—	—		—		—		—		—	—		—		—		—
Distributions to noncontrolling interests, net	—			—	—		—		—		—		—	—		—		(5)		(5)
June 30, 2021	2	$	1,433	471	$	5	$	6,476	$	(2,659)	$	(202)	—	$	—	$	3,620	$	19	$	3,639

(1) Net income (loss) is computed independently each quarter. As a result, the quarter amounts presented herein may be rounded to agree to accumulated deficit in the accompanying unaudited condensed consolidated balance sheet.

(2) See "767 Auto Leasing LLC" in Note 13, "Related Party Transactions."

HERTZ GLOBAL HOLDINGS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY

Unaudited

(In millions)



	Preferred Stock Shares	Preferred Stock Amount		Common Stock Shares	Common Stock Amount		Additional Paid-In Capital		Accumulated Deficit		Accumulated Other Comprehensive Income (Loss)		Treasury Stock Shares	Treasury Stock Amount		Total Stockholders' Equity
Balance as of:
December 31, 2021	—	$	—	450	$	5	$	6,209	$	(2,315)	$	(214)	27	$	(708)	$	2,977
Net income (loss)	—	—		—	—		—		426		—		—	—		426
Other comprehensive income (loss)	—	—		—	—		—		—		(7)		—	—		(7)
Net settlement on vesting of restricted stock	—	—		—	—		(4)		—		—		—	—		(4)
Stock-based compensation charges, net of tax	—	—		—	—		28		—		—		—	—		28
Public Warrant exercises(1)	—	—		—	—		4		—		—		—	—		4
Share repurchases	—	—		(35)	—		—		—		—		35	(722)		(722)

March 31, 2022	—	—		415	5		6,237		(1,889)		(221)		62	(1,430)		2,702
Net income (loss)	—	—		—	—		—		940		—		—	—		940
Other comprehensive income (loss)	—	—		—	—		—		—		(59)		—	—		(59)
Stock-based compensation charges, net of tax	—	—		—	—		36		—		—		—	—		36
Public Warrant exercises(1)	—	—		—	—		1		—		—		—	—		1
Share repurchases	—	—		(47)	—		—		—		—		47	(891)		(891)
June 30, 2022	—	$	—	368	$	5	$	6,274	$	(949)	$	(280)	109	$	(2,321)	$	2,729

(1) See Note 8, "Public Warrants, Equity and Earnings (Loss) Per Common Share – Hertz Global."

The accompanying notes are an integral part of these financial statements.

Table of Contents

HERTZ GLOBAL HOLDINGS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

Unaudited

(In millions)


		Nine Months Ended September 30,					Six Months Ended June 30,
		2021		2020			2022		2021
Cash flows from operating activities:	Cash flows from operating activities:					Cash flows from operating activities:
Net income (loss)	Net income (loss)	$	627	$	(1,432)	Net income (loss)	$	1,366	$	19
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:	Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:					Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
Depreciation and reserves for revenue earning vehicles		506		1,809
Depreciation and reserves for revenue earning vehicles, net						Depreciation and reserves for revenue earning vehicles, net	145		420
Depreciation and amortization, non-vehicle	Depreciation and amortization, non-vehicle	153		168		Depreciation and amortization, non-vehicle	69		104
Amortization of deferred financing costs and debt discount (premium)	Amortization of deferred financing costs and debt discount (premium)	109		37		Amortization of deferred financing costs and debt discount (premium)	25		98
Loss on extinguishment of debt	Loss on extinguishment of debt	8		5		Loss on extinguishment of debt	—		8

Stock-based compensation charges						Stock-based compensation charges	64		2
Provision for receivables allowance	Provision for receivables allowance	95		66		Provision for receivables allowance	23		64
Deferred income taxes, net	Deferred income taxes, net	125		(243)		Deferred income taxes, net	249		(16)
Technology-related intangible and other asset impairments		—		193

Reorganization items, net	Reorganization items, net	314		1		Reorganization items, net	—		314
(Gain) loss from the sale of a business	(Gain) loss from the sale of a business	(400)		—		(Gain) loss from the sale of a business	—		(400)
(Gain) loss on sale of non-vehicle capital assets		(8)		(24)

Change in fair value of Public Warrants	Change in fair value of Public Warrants	(16)		—		Change in fair value of Public Warrants	(511)		—

(Gain) loss on financial instruments						(Gain) loss on financial instruments	(65)		2

Other	Other	(6)		(4)		Other	(3)		(10)
Changes in assets and liabilities:	Changes in assets and liabilities:					Changes in assets and liabilities:
Non-vehicle receivables	Non-vehicle receivables	(223)		231		Non-vehicle receivables	(200)		(214)
Prepaid expenses and other assets	Prepaid expenses and other assets	(53)		33		Prepaid expenses and other assets	(87)		(67)
Operating lease right-of-use assets	Operating lease right-of-use assets	203		277		Operating lease right-of-use assets	79		154
Non-vehicle accounts payable	Non-vehicle accounts payable	(45)		224		Non-vehicle accounts payable	(32)		94
Accrued liabilities	Accrued liabilities	(43)		(47)		Accrued liabilities	233		(11)
Accrued taxes, net	Accrued taxes, net	89		(4)		Accrued taxes, net	52		91
Operating lease liabilities	Operating lease liabilities	(214)		(287)		Operating lease liabilities	(93)		(160)
Self-insured liabilities	Self-insured liabilities	(13)		(75)		Self-insured liabilities	15		(27)
Net cash provided by (used in) operating activities	Net cash provided by (used in) operating activities	1,208		928		Net cash provided by (used in) operating activities	1,329		465
Cash flows from investing activities:	Cash flows from investing activities:					Cash flows from investing activities:
Revenue earning vehicles expenditures	Revenue earning vehicles expenditures	(5,196)		(5,188)		Revenue earning vehicles expenditures	(6,089)		(4,136)
Proceeds from disposal of revenue earning vehicles	Proceeds from disposal of revenue earning vehicles	1,945		8,770		Proceeds from disposal of revenue earning vehicles	2,887		1,199
Non-vehicle capital asset expenditures	Non-vehicle capital asset expenditures	(41)		(89)		Non-vehicle capital asset expenditures	(59)		(17)
Proceeds from non-vehicle capital assets disposed of or to be disposed of	Proceeds from non-vehicle capital assets disposed of or to be disposed of	17		56		Proceeds from non-vehicle capital assets disposed of or to be disposed of	6		10
Sales of marketable securities		—		74

Collateral payments	Collateral payments	(303)		—		Collateral payments	—		(303)
Collateral returned in exchange for letters of credit	Collateral returned in exchange for letters of credit	268		—		Collateral returned in exchange for letters of credit	19		114
Return of (investment in) equity investments						Return of (investment in) equity investments	(15)		—
Proceeds from the sale of a business, net of cash sold	Proceeds from the sale of a business, net of cash sold	871		—		Proceeds from the sale of a business, net of cash sold	—		818
Other	Other	(1)		(1)		Other	—		(1)
Net cash provided by (used in) investing activities	Net cash provided by (used in) investing activities	(2,440)		3,622		Net cash provided by (used in) investing activities	(3,251)		(2,316)
Cash flows from financing activities:
Proceeds from issuance of vehicle debt		10,462		4,226

The accompanying notes are an integral part of these financial statements.

Table of Contents

HERTZ GLOBAL HOLDINGS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

Unaudited

(In millions)


				Six Months Ended June 30,
		Nine Months Ended September 30,						2022		2021
		2021			2020
Cash flows from financing activities:							Cash flows from financing activities:
Proceeds from issuance of vehicle debt							Proceeds from issuance of vehicle debt	7,379		8,939
Repayments of vehicle debt	Repayments of vehicle debt	(9,463)			(8,931)		Repayments of vehicle debt	(4,824)		(8,120)
Proceeds from issuance of non-vehicle debt	Proceeds from issuance of non-vehicle debt	3,139			1,553		Proceeds from issuance of non-vehicle debt	—		3,139
Repayments of non-vehicle debt	Repayments of non-vehicle debt	(6,346)			(854)		Repayments of non-vehicle debt	(10)		(6,341)
Payment of financing costs	Payment of financing costs	(154)			(11)		Payment of financing costs	(38)		(151)
Proceeds from Plan Sponsors	Proceeds from Plan Sponsors	2,781			—		Proceeds from Plan Sponsors	—		2,781
Proceeds from Rights Offering, net	Proceeds from Rights Offering, net	1,639			—		Proceeds from Rights Offering, net	—		1,635
Proceeds from the issuance of preferred stock, net	Proceeds from the issuance of preferred stock, net	1,433			—		Proceeds from the issuance of preferred stock, net	—		1,433
Distributions to common stockholders	Distributions to common stockholders	(239)			—		Distributions to common stockholders	—		(239)
Proceeds from the issuance of stock, net		—			28
Proceeds from exercises of Public Warrants							Proceeds from exercises of Public Warrants	3		—

Share repurchases							Share repurchases	(1,647)		—
Early redemption payments	Early redemption payments	(85)			—		Early redemption payments	—		(85)
Contributions from (distributions to) noncontrolling interests	Contributions from (distributions to) noncontrolling interests	(25)			(55)		Contributions from (distributions to) noncontrolling interests	—		(15)
Other	Other	—			(2)		Other	(4)		—
Net cash provided by (used in) financing activities	Net cash provided by (used in) financing activities	3,142			(4,046)		Net cash provided by (used in) financing activities	859		2,976
Effect of foreign currency exchange rate changes on cash, cash equivalents, restricted cash and restricted cash equivalents		(22)			18
Net increase (decrease) in cash, cash equivalents, restricted cash and restricted cash equivalents during the period		1,888			522
Cash, cash equivalents, restricted cash and restricted cash equivalents at beginning of period(1)		1,578			1,360
Cash, cash equivalents, restricted cash and restricted cash equivalents at end of period		$	3,466		$	1,882
Effect of foreign currency exchange rate changes on cash and cash equivalents and restricted cash and cash equivalents							Effect of foreign currency exchange rate changes on cash and cash equivalents and restricted cash and cash equivalents	(25)		(8)
Net increase (decrease) in cash and cash equivalents and restricted cash and cash equivalents during the period							Net increase (decrease) in cash and cash equivalents and restricted cash and cash equivalents during the period	(1,088)		1,117
Cash and cash equivalents and restricted cash and cash equivalents at beginning of period(1)							Cash and cash equivalents and restricted cash and cash equivalents at beginning of period(1)	2,651		1,578
Cash and cash equivalents and restricted cash and cash equivalents at end of period							Cash and cash equivalents and restricted cash and cash equivalents at end of period	$	1,563	$	2,695

Supplemental disclosures of cash flow information:	Supplemental disclosures of cash flow information:						Supplemental disclosures of cash flow information:
Cash paid during the period for:	Cash paid during the period for:						Cash paid during the period for:
Interest, net of amounts capitalized:	Interest, net of amounts capitalized:						Interest, net of amounts capitalized:
Vehicle	Vehicle	$	227		$	275	Vehicle	$	92	$	203
Non-vehicle	Non-vehicle	181			78		Non-vehicle	74		158
Income taxes, net of refunds	Income taxes, net of refunds	20			(13)		Income taxes, net of refunds	37		2

Supplemental disclosures of non-cash information:	Supplemental disclosures of non-cash information:						Supplemental disclosures of non-cash information:
Purchases of revenue earning vehicles included in accounts payable, net of incentives	Purchases of revenue earning vehicles included in accounts payable, net of incentives	$	7		$	30	Purchases of revenue earning vehicles included in accounts payable, net of incentives	$	128	$	39
Sales of revenue earning vehicles included in vehicle receivables	Sales of revenue earning vehicles included in vehicle receivables	100			575		Sales of revenue earning vehicles included in vehicle receivables	81		33

Purchases of non-vehicle capital assets included in accounts payable	Purchases of non-vehicle capital assets included in accounts payable	21			7		Purchases of non-vehicle capital assets included in accounts payable	21		24
Purchases of non-vehicle capital assets included in liabilities subject to compromise		—			20
Revenue earning vehicles and non-vehicle capital assets acquired through capital lease		73			21

Revenue earning vehicles and non-vehicle capital assets acquired through finance lease							Revenue earning vehicles and non-vehicle capital assets acquired through finance lease	6		56
Public Warrants issuance	Public Warrants issuance	800			—		Public Warrants issuance	—		800
Cashless exercise of Public Warrants		1			—
Backstop equity issuance		164			—
Public Warrant exercises							Public Warrant exercises	3		—

The accompanying notes are an integral part of these financial statements.

Table of Contents

HERTZ GLOBAL HOLDINGS, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

Unaudited

(In millions)


	Six Months Ended June 30,
	2022	2021
Accrual for purchases of treasury shares	20	—
Backstop equity issuance	—	164

(1) Amounts include cash and cash equivalents and restricted cash and cash equivalents which were held for sale at December 31, 2020, prior to the completion of the ~~sale~~Donlen Sale in the first quarter of ~~2021.~~2021, as disclosed in Note 3, "Divestitures."

The accompanying notes are an integral part of these financial statements.

Table of Contents

THE HERTZ CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

Unaudited

(In millions, except par value and share data)


		September 30, 2021		December 31, 2020			June 30, 2022		December 31, 2021
ASSETS	ASSETS					ASSETS
Cash and cash equivalents	Cash and cash equivalents	$	2,703	$	1,096	Cash and cash equivalents	$	1,041	$	2,257
Restricted cash and cash equivalents:	Restricted cash and cash equivalents:					Restricted cash and cash equivalents:
Vehicle	Vehicle	320		50		Vehicle	221		77
Non-vehicle	Non-vehicle	443		333		Non-vehicle	301		316
Total restricted cash and cash equivalents	Total restricted cash and cash equivalents	763		383		Total restricted cash and cash equivalents	522		393
Total cash, cash equivalents, restricted cash and restricted cash equivalents		3,466		1,479
Total cash and cash equivalents and restricted cash and cash equivalents						Total cash and cash equivalents and restricted cash and cash equivalents	1,563		2,650
Receivables:	Receivables:					Receivables:
Vehicle	Vehicle	139		164		Vehicle	136		62
Non-vehicle, net of allowance of $58 and $46, respectively		751		613
Non-vehicle, net of allowance of $42 and $48, respectively						Non-vehicle, net of allowance of $42 and $48, respectively	839		695
Total receivables, net	Total receivables, net	890		777		Total receivables, net	975		757
Due from Hertz Holdings		—		1

Prepaid expenses and other assets	Prepaid expenses and other assets	642		372		Prepaid expenses and other assets	1,093		1,016
Revenue earning vehicles:	Revenue earning vehicles:					Revenue earning vehicles:
Vehicles	Vehicles	10,122		7,540		Vehicles	13,962		10,836
Less: accumulated depreciation	Less: accumulated depreciation	(1,559)		(1,478)		Less: accumulated depreciation	(1,632)		(1,610)
Total revenue earning vehicles, net	Total revenue earning vehicles, net	8,563		6,062		Total revenue earning vehicles, net	12,330		9,226
Property and equipment, net	Property and equipment, net	609		666		Property and equipment, net	605		608
Operating lease right-of-use assets	Operating lease right-of-use assets	1,453		1,675		Operating lease right-of-use assets	1,562		1,566
Intangible assets, net	Intangible assets, net	2,925		2,992		Intangible assets, net	2,893		2,912
Goodwill	Goodwill	1,045		1,045		Goodwill	1,044		1,045
Assets held for sale		—		1,811

Total assets~~(a)~~(1)	Total assets~~(a)~~(1)	$	19,593	$	16,880	Total assets~~(a)~~(1)	$	22,065	$	19,780
LIABILITIES AND STOCKHOLDER'S EQUITY (DEFICIT)
LIABILITIES AND STOCKHOLDER'S EQUITY						LIABILITIES AND STOCKHOLDER'S EQUITY
Accounts payable:	Accounts payable:					Accounts payable:
Vehicle	Vehicle	$	46	$	29	Vehicle	$	182	$	56
Non-vehicle	Non-vehicle	540		389		Non-vehicle	477		516
Total accounts payable	Total accounts payable	586		418		Total accounts payable	659		572
Accrued liabilities	Accrued liabilities	905		759		Accrued liabilities	1,027		809
Accrued taxes, net	Accrued taxes, net	228		121		Accrued taxes, net	206		157
Debt:	Debt:					Debt:
Vehicle	Vehicle	7,207		6,024		Vehicle	10,411		7,921
Non-vehicle	Non-vehicle	1,511		243		Non-vehicle	2,981		2,986
Total debt	Total debt	8,718		6,267		Total debt	13,392		10,907
Operating lease liabilities	Operating lease liabilities	1,402		1,636		Operating lease liabilities	1,493		1,510
Self-insured liabilities	Self-insured liabilities	470		488		Self-insured liabilities	470		463
Deferred income taxes, net	Deferred income taxes, net	851		735		Deferred income taxes, net	1,262		1,012
Total liabilities not subject to compromise		13,160		10,424
Liabilities subject to compromise		—		5,030
Liabilities held for sale		—		1,431

Total liabilities~~(a)~~(1)	Total liabilities~~(a)~~(1)	13,160		16,885		Total liabilities~~(a)~~(1)	18,509		15,430
Commitments and contingencies	Commitments and contingencies	0		0		Commitments and contingencies	0		0
Stockholder's equity (deficit):
Common stock, $0.01 par value, 100 and 100 shares issued and outstanding, respectively		—		—
Stockholder's equity:						Stockholder's equity:
Common stock, $0.01 par value, 3,000 shares authorized and 100 shares issued and outstanding						Common stock, $0.01 par value, 3,000 shares authorized and 100 shares issued and outstanding	—		—
Additional paid-in capital	Additional paid-in capital	9,587		3,953		Additional paid-in capital	5,606		7,190
Due to Hertz Holdings		65		—

Retained earnings (Accumulated deficit)	Retained earnings (Accumulated deficit)	(3,005)		(3,783)		Retained earnings (Accumulated deficit)	(1,770)		(2,626)
Accumulated other comprehensive income (loss)	Accumulated other comprehensive income (loss)	(226)		(212)		Accumulated other comprehensive income (loss)	(280)		(214)
Stockholder's equity (deficit) attributable to Hertz		6,421		(42)
Noncontrolling interests		12		37
Total stockholder's equity (deficit)		6,433		(5)
Total liabilities and stockholder's equity (deficit)		$	19,593	$	16,880

Total stockholder's equity						Total stockholder's equity	3,556		4,350
Total liabilities and stockholder's equity						Total liabilities and stockholder's equity	$	22,065	$	19,780

~~(a)~~(1) The Hertz Corporation's consolidated total assets as of ~~September~~June 30, ~~2021~~2022 and December 31, ~~2020~~2021 include total assets of VIEs of ~~$745~~$838 million and ~~$511~~$734 million, respectively, which can only be used to settle obligations of the VIEs. The Hertz Corporation's consolidated total liabilities as of ~~September~~June 30, ~~2021~~2022 and December 31, ~~2020~~2021 include total liabilities of VIEs of ~~$734~~$837 million and ~~$475~~$733 million, respectively, for which the creditors of the VIEs have no recourse to The Hertz Corporation. See "Pledges Related to Vehicle ~~Financing "~~Financing" in Note 6,5, "Debt,~~" and "767 Auto Leasing LLC" in Note 15, "Related Party Transactions,~~" for further information.

The accompanying notes are an integral part of these financial statements.

Table of Contents

THE HERTZ CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

Unaudited

(In millions)

Three Months Ended
September 30, Nine Months Ended
September 30,
2021 2020 2021 2020
Revenues $ 2,226 $ 1,268 $ 5,387 $ 4,023
Expenses:
Direct vehicle and operating 1,131 779 2,855 2,624
Depreciation of revenue earning vehicles and lease charges 61 347 420 1,632
Non-vehicle depreciation and amortization 49 58 153 168
Selling, general and administrative 177 138 498 506
Interest expense, net:
Vehicle 41 110 243 360
Non-vehicle (excludes contractual interest of $53 million and $75 million for the three and nine months ended September 30, 2020, respectively) 22 17 157 116
Total interest expense, net 63 127 400 476
Technology-related intangible and other asset impairments — — — 193
Write-off of intercompany loan — — — 133
Other (income) expense, net (7) — (20) (15)
Reorganization items, net — 78 513 101
(Gain) from the sale of a business — — (400) —
Total expenses 1,474 1,527 4,419 5,818
Income (loss) before income taxes 752 (259) 968 (1,795)
Income tax (provision) benefit (156) 36 (189) 259
Net income (loss) 596 (223) 779 (1,536)
Net (income) loss attributable to noncontrolling interests (3) 1 (1) 7
Net income (loss) attributable to Hertz $ 593 $ (222) $ 778 $ (1,529)



	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021



Revenues	$	2,344	$	1,873	$	4,154	$	3,161
Expenses:
Direct vehicle and operating	1,199		946		2,252		1,724
Depreciation of revenue earning vehicles and lease charges, net	106		116		47		359
Non-vehicle depreciation and amortization	36		50		69		104
Selling, general and administrative	257		172		492		321
Interest expense, net:
Vehicle	45		98		50		202
Non-vehicle	41		91		80		135
Total interest expense, net	86		189		130		337

Other (income) expense, net	2		(10)		—		(13)
Reorganization items, net	—		469		—		513
(Gain) from the sale of a business	—		(8)		—		(400)
Total expenses	1,686		1,924		2,990		2,945
Income (loss) before income taxes	658		(51)		1,164		216
Income tax (provision) benefit	(178)		46		(308)		(33)
Net income (loss)	480		(5)		856		183
Net (income) loss attributable to noncontrolling interests	—		1		—		2
Net income (loss) attributable to Hertz	$	480	$	(4)	$	856	$	185

~~The accompanying notes are an integral part of these financial statements.~~

~~Table of Contents~~

~~THE HERTZ CORPORATION AND SUBSIDIARIES~~

~~CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)~~

~~Unaudited~~

~~(In millions)~~

Three Months Ended
September 30, Nine Months Ended
September 30,
2021 2020 2021 2020
Net income (loss) $ 596 $ (223) $ 779 $ (1,536)
Other comprehensive income (loss):
Foreign currency translation adjustments (24) (6) (14) (32)
Net gain (loss) on pension and postretirement benefit plans — 15 — 1
Reclassification from other comprehensive income (loss) to other (income) expense for amortization of actuarial net losses — 1 — 6
Total other comprehensive income (loss) before income taxes (24) 10 (14) (25)
Income tax (provision) benefit related to pension and postretirement benefit plans — (4) — —
Income tax (provision) benefit related to reclassified amounts of net periodic costs on pension and postretirement benefit plans — (1) — (2)
Total other comprehensive income (loss) (24) 5 (14) (27)
Total comprehensive income (loss) 572 (218) 765 (1,563)
Comprehensive (income) loss attributable to noncontrolling interests (3) 1 (1) 7
Comprehensive income (loss) attributable to Hertz $ 569 $ (217) $ 764 $ (1,556)

The accompanying notes are an integral part of these financial statements.

Table of Contents

THE HERTZ CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF ~~CHANGES IN STOCKHOLDER'S EQUITY (DEFICIT)~~COMPREHENSIVE INCOME (LOSS)

Unaudited

(In ~~millions, except share data)~~millions)

Common Stock Shares Common Stock Amount Additional
Paid-In Capital Due From Affiliate
Accumulated
Deficit(1)
Accumulated
Other
Comprehensive
Income (Loss) Stockholder's Equity Attributable to Hertz Noncontrolling Interests Total Stockholder's Equity
Balance as of:
December 31, 2019 100 $ — $ 3,955 $ (64) $ (1,937) $ (189) $ 1,765 $ 119 $ 1,884
Net income (loss) — — — — (355) — (355) (1) (356)
Due from Hertz Holdings — — — (3) — — (3) — (3)
Other comprehensive income (loss) — — — — — (39) (39) — (39)
Contributions from noncontrolling interests — — — — — — — 1 1
March 31, 2020 100 — 3,955 (67) (2,292) (228) 1,368 119 1,487
Net income (loss) — — — — (951) — (951) (5) (956)
Due from Hertz Holdings — — — (1) — — (1) — (1)
Liabilities subject to compromise(2)
— — — (65) — — (65) — (65)
Write-off of intercompany loan(3)
— — — 133 — — 133 — 133
Other comprehensive income (loss) — — — — — 7 7 — 7
Stock-based compensation charges — — (2) — — — (2) — (2)
June 30, 2020 100 — 3,953 — (3,243) (221) 489 114 603
Net income (loss) — — — — (223) — (223) (1) (224)
Other comprehensive income (loss) — — — — — 5 5 — 5
Distributions to noncontrolling interests — — — — — — — (54) (54)
September 30, 2020 100 $ — $ 3,953 $ — $ (3,466) $ (216) $ 271 $ 59 $ 330


	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
Net income (loss)	$	480	$	(5)	$	856	$	183
Other comprehensive income (loss):
Foreign currency translation adjustments	(59)		(7)		(66)		10







Total other comprehensive income (loss)	(59)		(7)		(66)		10
Total comprehensive income (loss)	421		(12)		790		193
Comprehensive (income) loss attributable to noncontrolling interests	—		1		—		2
Comprehensive income (loss) attributable to Hertz	$	421	$	(11)	$	790	$	195

The accompanying notes are an integral part of these financial statements.

Table of Contents

THE HERTZ CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDER'S EQUITY (DEFICIT)

Unaudited

(In millions, except share data)


		Common Stock Shares	Common Stock Amount				Additional Paid-In Capital		Due To Affiliate				Accumulated Deficit(1)				Accumulated Other Comprehensive Income (Loss)			Stockholder's Equity Attributable to Hertz			Noncontrolling Interests			Total Stockholder's Equity (Deficit)			Common Stock Shares		Common Stock Amount				Additional Paid-In Capital			Due To Affiliate			Accumulated Deficit			Accumulated Other Comprehensive Income (Loss)			Stockholder's Equity Attributable to Hertz			Noncontrolling Interests(1)			Total Stockholder's Equity (Deficit)
Balance as of:	Balance as of:														Balance as of:
December 31, 2020	December 31, 2020	100			$	—					$	3,953			$	—			$	(3,783)		$	(212)		$	(42)			$	37	$	(5)	December 31, 2020	100			$	—		$	3,953		$	—		$	(3,783)		$	(212)		$	(42)		$	37	$	(5)
Net income (loss)	Net income (loss)	—	—				—		—				190				—			190			(1)			189		Net income (loss)	—		—				—			—			190			—			190			(1)			189

Other comprehensive income (loss)	Other comprehensive income (loss)	—	—				—		—				—				17			17			—			17		Other comprehensive income (loss)	—		—				—			—			—			17			17			—			17
Stock-based compensation charges	Stock-based compensation charges	—	—				2		—				—				—			2			—			2		Stock-based compensation charges	—		—				2			—			—			—			2			—			2
Distributions to noncontrolling interests	Distributions to noncontrolling interests	—	—				—		—				—				—			—			(11)			(11)		Distributions to noncontrolling interests	—		—				—			—			—			—			—			(11)			(11)
March 31, 2021	March 31, 2021	100	—				3,955		—				(3,593)				(195)			167			25			192		March 31, 2021	100		$	—			3,955			—			(3,593)			(195)			167			25			192
Net income (loss)	Net income (loss)	—	—				—		—				(4)				—			(4)			(1)			(5)		Net income (loss)	—		—				—			—			(4)			—			(4)			(1)			(5)
Due to Hertz Holdings	Due to Hertz Holdings	—	—				—		65				—				—			65			—			65		Due to Hertz Holdings	—		—				—			65			—			—			65			—			65
Other comprehensive income (loss)																												Other comprehensive income (loss)	—		—				—			—			—			(7)			(7)			—			(7)
Cancellation of stock-based awards																												Cancellation of stock-based awards	—		—				(10)			—			—			—			(10)			—			(10)

Contributions from Hertz Holdings																												Contributions from Hertz Holdings	—		—				5,638			—			—			—			5,638			—			5,638
Distributions to noncontrolling interests																												Distributions to noncontrolling interests	—		—				—			—			—			—			—			(5)			(5)
June 30, 2021																												June 30, 2021	100		$	—			$	9,583		$	65		$	(3,597)		$	(202)		$	5,849		$	19		$	5,868

Other comprehensive income (loss)		—	—				—		—				—				(7)			(7)			—			(7)

Cancellation of stock-based awards		—	—				(10)		—				—				—			(10)			—			(10)
Contributions from Hertz Holdings		—	—				5,638		—				—				—			5,638			—			5,638
Distributions to noncontrolling interests		—	—				—		—				—				—			—			(5)			(5)

June 30, 2021		100	—				9,583		65				(3,597)				(202)			5,849			19			5,868
Net income (loss)		—	—				—		—				592				—			592			3			595
Contributions from Hertz Holdings		—	—				4		—				—				—			4			—			4
Other comprehensive income (loss)		—	—				—		—				—				(24)			(24)			—			(24)

Distributions to noncontrolling interests		—	—				—		—				—				—			—			(10)			(10)
September 30, 2021		100	$	—			$	9,587	$	65			$	(3,005)			$	(226)		$	6,421		$	12		$	6,433


	Common Stock Shares	Common Stock Amount		Additional Paid-In Capital		Accumulated Deficit		Accumulated Other Comprehensive Income (Loss)		Total Stockholder's Equity
Balance as of:
December 31, 2021	100	$	—	$	7,190	$	(2,626)	$	(214)	$	4,350
Net income (loss)	—	—		—		376		—		376
Other comprehensive income (loss)	—	—		—		—		(7)		(7)
Stock-based compensation charges	—	—		28		—		—		28
Dividends paid to Hertz Holdings(2)	—	—		(767)		—		—		(767)
March 31, 2022	100	—		6,451		(2,250)		(221)		3,980
Net income (loss)	—	—		—		480		—		480
Other comprehensive income (loss)	—	—		—		—		(59)		(59)
Stock-based compensation charges	—	—		36		—		—		36
Dividends paid to Hertz Holdings(2)	—	—		(881)		—		—		(881)
June 30, 2022	100	$	—	$	5,606	$	(1,770)	$	(280)	$	3,556

(1) ~~Net income (loss) is computed independently each quarter. As a result, the quarter amounts presented herein may be rounded to agree to accumulated deficit~~See "767 Auto Leasing LLC" in ~~the accompanying unaudited condensed consolidated balance sheet.~~Note 13, "Related Party Transactions."

(2) ~~As a result of filing the Chapter 11 Cases, a pre-petition loan due to an affiliate was classified as liabilities subject to compromise~~See "Share Repurchase Programs for Common Stock" in ~~the accompanying unaudited condensed consolidated balance sheet as of December 31, 2020. See~~ Note 17~~, "Liabilities Subject to Compromise~~."

~~(3) As a result of filing the Chapter 11 Cases, the full amount outstanding under a loan due from affiliate was deemed uncollectible~~8, "Public Warrants, Equity and ~~written off. See Note 15~~, Earnings (Loss) Per Common Share – Hertz Global,"~~Related Party Transactions~~." for additional information.

The accompanying notes are an integral part of these financial statements.

1112

Table of Contents

THE HERTZ CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

Unaudited

(In millions)


		Nine Months Ended September 30,					Six Months Ended June 30,
		2021		2020			2022		2021
Cash flows from operating activities:	Cash flows from operating activities:					Cash flows from operating activities:
Net income (loss)	Net income (loss)	$	779	$	(1,536)	Net income (loss)	$	856	$	183
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:	Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:					Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
Depreciation and reserves for revenue earning vehicles		506		1,809
Depreciation and reserves for revenue earning vehicles, net						Depreciation and reserves for revenue earning vehicles, net	145		420
Depreciation and amortization, non-vehicle	Depreciation and amortization, non-vehicle	153		168		Depreciation and amortization, non-vehicle	69		104
Amortization of deferred financing costs and debt discount (premium)	Amortization of deferred financing costs and debt discount (premium)	109		37		Amortization of deferred financing costs and debt discount (premium)	25		98
Loss on extinguishment of debt	Loss on extinguishment of debt	8		5		Loss on extinguishment of debt	—		8

Stock-based compensation charges						Stock-based compensation charges	64		2
Provision for receivables allowance	Provision for receivables allowance	95		66		Provision for receivables allowance	23		64
Deferred income taxes, net	Deferred income taxes, net	121		(271)		Deferred income taxes, net	249		(16)
Technology-related intangible and other asset impairments		—		193
Write-off of intercompany loan		—		133

Reorganization items, net	Reorganization items, net	150		1		Reorganization items, net	—		150
(Gain) loss from the sale of a business	(Gain) loss from the sale of a business	(400)		—		(Gain) loss from the sale of a business	—		(400)
(Gain) loss on sale of non-vehicle capital assets		(8)		(24)

(Gain) loss on financial instruments						(Gain) loss on financial instruments	(65)		2
Other	Other	(6)		(2)		Other	(3)		(10)
Changes in assets and liabilities:	Changes in assets and liabilities:					Changes in assets and liabilities:
Non-vehicle receivables	Non-vehicle receivables	(223)		231		Non-vehicle receivables	(200)		(214)
Prepaid expenses and other assets	Prepaid expenses and other assets	(53)		33		Prepaid expenses and other assets	(87)		(67)
Operating lease right-of-use assets	Operating lease right-of-use assets	203		277		Operating lease right-of-use assets	79		154
Non-vehicle accounts payable	Non-vehicle accounts payable	(45)		224		Non-vehicle accounts payable	(32)		94
Accrued liabilities	Accrued liabilities	(43)		(47)		Accrued liabilities	233		(11)
Accrued taxes, net	Accrued taxes, net	89		(4)		Accrued taxes, net	52		91
Operating lease liabilities	Operating lease liabilities	(214)		(287)		Operating lease liabilities	(93)		(160)
Self-insured liabilities	Self-insured liabilities	(13)		(75)		Self-insured liabilities	15		(27)
Net cash provided by (used in) operating activities	Net cash provided by (used in) operating activities	1,208		931		Net cash provided by (used in) operating activities	1,330		465
Cash flows from investing activities:	Cash flows from investing activities:					Cash flows from investing activities:
Revenue earning vehicles expenditures	Revenue earning vehicles expenditures	(5,196)		(5,188)		Revenue earning vehicles expenditures	(6,089)		(4,136)
Proceeds from disposal of revenue earning vehicles	Proceeds from disposal of revenue earning vehicles	1,945		8,770		Proceeds from disposal of revenue earning vehicles	2,887		1,199
Non-vehicle capital asset expenditures	Non-vehicle capital asset expenditures	(41)		(89)		Non-vehicle capital asset expenditures	(59)		(17)
Proceeds from non-vehicle capital assets disposed of or to be disposed of	Proceeds from non-vehicle capital assets disposed of or to be disposed of	17		56		Proceeds from non-vehicle capital assets disposed of or to be disposed of	6		10
Sales of marketable securities		—		74

Collateral payments	Collateral payments	(303)		—		Collateral payments	—		(303)
Collateral returned in exchange for letters of credit	Collateral returned in exchange for letters of credit	268		—		Collateral returned in exchange for letters of credit	19		114
Return of (investment in) equity investments						Return of (investment in) equity investments	(15)		—
Proceeds from the sale of a business, net of cash sold	Proceeds from the sale of a business, net of cash sold	871		—		Proceeds from the sale of a business, net of cash sold	—		818
Other	Other	(1)		(1)		Other	—		(1)
Net cash provided by (used in) investing activities	Net cash provided by (used in) investing activities	(2,440)		3,622		Net cash provided by (used in) investing activities	(3,251)		(2,316)
Cash flows from financing activities:						Cash flows from financing activities:
Proceeds from issuance of vehicle debt						Proceeds from issuance of vehicle debt	7,379		8,939
Repayments of vehicle debt						Repayments of vehicle debt	(4,824)		(8,120)

The accompanying notes are an integral part of these financial statements.

1213

Table of Contents

THE HERTZ CORPORATION AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

Unaudited

(In millions)

Nine Months Ended
September 30,
2021 2020
Cash flows from financing activities:
Proceeds from issuance of vehicle debt 10,462 4,226
Repayments of vehicle debt (9,463) (8,931)
Proceeds from issuance of non-vehicle debt 3,139 1,553
Repayments of non-vehicle debt (6,346) (854)
Payment of financing costs (154) (11)
Contributions from Hertz Holdings 5,642 —
Advances to Hertz Holdings — (5)
Early redemption payments (85) —
Contributions from (distributions to) noncontrolling interests (25) (55)
Net cash provided by (used in) financing activities 3,170 (4,077)
Effect of foreign currency exchange rate changes on cash, cash equivalents, restricted cash and restricted cash equivalents (22) 18
Net increase (decrease) in cash, cash equivalents, restricted cash and restricted cash equivalents during the period 1,916 494
Cash, cash equivalents, restricted cash and restricted cash equivalents at beginning of period(1)
1,550 1,360
Cash, cash equivalents, restricted cash and restricted cash equivalents at end of period $ 3,466 $ 1,854
Supplemental disclosures of cash flow information:
Cash paid during the period for:
Interest, net of amounts capitalized:
Vehicle $ 227 $ 275
Non-vehicle 181 78
Income taxes, net of refunds 20 (13)
Supplemental disclosures of non-cash information:
Purchases of revenue earning vehicles included in accounts payable, net of incentives $ 7 $ 30
Sales of revenue earning vehicles included in vehicle receivables 100 575
Purchases of non-vehicle capital assets included in accounts payable 21 7
Purchases of non-vehicle capital assets included in liabilities subject to compromise — 20
Revenue earning vehicles and non-vehicle capital assets acquired through capital lease 73 21


	Six Months Ended June 30,
	2022		2021
Proceeds from issuance of non-vehicle debt	—		3,139
Repayments of non-vehicle debt	(10)		(6,341)
Payment of financing costs	(38)		(151)
Contributions from Hertz Holdings	—		5,638

Early redemption payments	—		(85)
Dividends paid to Hertz Holdings	(1,648)		—
Contributions from (distributions to) noncontrolling interests	—		(15)

Net cash provided by (used in) financing activities	859		3,004
Effect of foreign currency exchange rate changes on cash and cash equivalents and restricted cash and cash equivalents	(25)		(8)
Net increase (decrease) in cash and cash equivalents and restricted cash and cash equivalents during the period	(1,087)		1,145
Cash and cash equivalents and restricted cash and cash equivalents at beginning of period(1)	2,650		1,550
Cash and cash equivalents and restricted cash and cash equivalents at end of period	$	1,563	$	2,695

Supplemental disclosures of cash flow information:
Cash paid during the period for:
Interest, net of amounts capitalized:
Vehicle	$	92	$	203
Non-vehicle	74		158
Income taxes, net of refunds	37		2

Supplemental disclosures of non-cash information:
Purchases of revenue earning vehicles included in accounts payable, net of incentives	$	128	$	39
Sales of revenue earning vehicles included in vehicle receivables	81		33

Purchases of non-vehicle capital assets included in accounts payable	21		24

Revenue earning vehicles and non-vehicle capital assets acquired through finance lease	6		56

The accompanying notes are an integral part of these financial statements.

1314

Table of Contents

HERTZ GLOBAL HOLDINGS, INC. AND SUBSIDIARIES

THE HERTZ CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Unaudited

Note 1—Background

Hertz Global Holdings, Inc. ("Hertz Global" when including its subsidiaries and VIEs and "Hertz Holdings" when excluding its subsidiaries and VIEs) was incorporated in Delaware in 2015 to serve as the top-level holding company for Rental Car Intermediate Holdings, LLC, which wholly owns The Hertz Corporation ("Hertz" and interchangeably with Hertz Global, the "Company"), Hertz Global's primary operating company. Hertz was incorporated in Delaware in 1967 and is a successor to corporations that have been engaged in the vehicle rental and leasing business since 1918. On May 22, 2020, as a result of the impact from the COVID-19 global pandemic, Hertz Global, Hertz and certain of their direct and indirect subsidiaries in the U.S. and Canada (the "Debtors") filed voluntary petitions for relief under chapter 11 of title 11 ("Chapter 11") of the U.S. Bankruptcy Code (the "Chapter 11 Cases") in the U.S. Bankruptcy Court for the District of Delaware (the "Bankruptcy Court"). On June 10, 2021, a plan of reorganization (the "Plan of Reorganization") was confirmed by the Bankruptcy Court and on June 30, 2021, the Plan of Reorganization became effective and the Debtors emerged from Chapter 11.

Hertz operates its vehicle rental business globally primarily through the Hertz, Dollar and Thrifty brands from company-owned, licensee and franchisee locations in the United States ("U.S."), Africa, Asia, Australia, Canada, the Caribbean, Europe, Latin America, the Middle East and New Zealand. The Company also sells vehicles through Hertz Car Sales and operates the Firefly vehicle rental brand and Hertz 24/7 car sharing business in international markets. As disclosed in Note 3, "Divestitures," on March 30, 2021 the Company completed the ~~previously announced~~ sale of substantially all of the assets and certain liabilities of its Donlen subsidiary (the "Donlen Sale"), a business which provided vehicle leasing and fleet management services.

~~Chapter 11 and Emergence~~

In March 2020, the World Health Organization declared COVID-19 a global pandemic. In response to COVID-19, local and national governments around the world instituted shelter-in-place and similar orders and travel restrictions, and airline and other travel decreased suddenly and dramatically. As a result of the impact of COVID-19 and the associated government responses on travel demand, late in the first quarter of 2020, the Company experienced a high level of rental cancellations and a significant decline in forward bookings. In response, the Company began aggressive actions to eliminate costs. However, it faced significant ongoing expenses, including a large lease payment with respect to its vehicle fleet that increased as a result of COVID-19's impact on the car market.

On May 22, 2020 (the "Petition Date"), Hertz Global, Hertz and certain of their direct and indirect subsidiaries in the U.S. and Canada (collectively the "Debtors") filed voluntary petitions for relief (collectively, the "Petitions") under chapter 11 of title 11 ("Chapter 11") of the U.S. Bankruptcy Code (the "Bankruptcy Code") in the U.S. Bankruptcy Court for the District of Delaware (the "Bankruptcy Court"). The Chapter 11 cases (the "Chapter 11 Cases") were jointly administered for procedural purposes only under the caption ~~In re The Hertz Corporation, et al., Case No. 20-11218 (MFW)~~. On May 14, 2021, the Debtors filed the solicitation version of the First Modified Third Amended Joint Chapter 11 Plan of Reorganization of the Debtors (as amended, supplemented or otherwise modified in accordance with its terms, the "Plan of Reorganization"), and the solicitation version of the Supplement to the Disclosure Statement which was approved by the Bankruptcy Court on May 14, 2021 (as supplemented, the "Disclosure Statement").

On June 10, 2021, the Plan of Reorganization was confirmed by the Bankruptcy Court. On June 30, 2021 (the “Effective Date”), the Plan of Reorganization became effective in accordance with its terms and the Debtors emerged from Chapter 11 (the "Chapter 11 Emergence").

~~On the Effective Date, as a result of the Plan of Reorganization, the reorganized Company received cash proceeds of $7.5 billion comprised of:~~

•$2.8 billion from the purchase of common stock in reorganized Hertz Global by one or more funds associated with Knighthead Capital Management, LLC and its affiliates ("Knighthead"), one or more funds associated with Certares Opportunities LLC and its affiliates ("Certares"), investment funds, separate accounts and other entities owned (in whole or in part), controlled or managed by Apollo Capital Management L.P. and its affiliates (collectively "Apollo" and with Knighthead and Certares (the "Plan Sponsors"), and certain other investment funds and entities;

•$1.6 billion from the purchase of common stock in reorganized Hertz Global pursuant to the rights offering (the "Rights Offering") by Hertz Global's former equity holders, holders of the Company's Senior Notes and lenders under the Alternative Letter of Credit Facility and certain equity commitment parties pursuant to their obligations under the Equity Purchase and Commitment Agreement (the "EPCA");

~~Table of Contents~~

~~HERTZ GLOBAL HOLDINGS, INC. AND SUBSIDIARIES~~

~~THE HERTZ CORPORATION AND SUBSIDIARIES~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)~~

~~Unaudited~~

•~~$1.5 billion (less a 2% upfront discount and stock issuance fees) from the purchase of preferred stock of reorganized Hertz Global by Apollo; and~~

•~~$1.5 billion in proceeds from the Company's secured exit term loan facilities.~~

~~Such cash proceeds were used, in part, to provide payments to the Company's stakeholders pursuant to the terms of the Plan of Reorganization as follows:~~

•~~the holders of administrative, priority and secured claims received payment in cash in full;~~

•~~the holders of the approximately $1.0 billion of obligations owed with respect to the Company's debtor-in-possession financing (the "DIP Credit Agreement") received payment in cash in full;~~

•~~the holders of the Company's Senior Term Loan, Senior RCF and Letter of Credit Facility received payment in cash in full with respect to all non-contingent liquidated claims;~~

•~~the holders of claims with respect to the Senior Second Priority Secured Notes received payment in cash in full;~~

•~~the holders of the Company's €725 million European Vehicle Notes received payment in cash in full;~~

•~~the holders of the €257 million term loan facility incurred by Hertz International Ltd. received payment in cash in full;~~

•the holders of claims with respect to the unsecured Senior Notes and the holders of claims with respect to the Alternative Letter of Credit Facility received payment in cash with respect to (i) all remaining principal, (ii) accrued and unpaid interest as of the Petition Date at the contract rate, and (iii) accrued and unpaid interest from the Petition Date to the Effective Date at the federal judgment rate (at such rate in effect as of the Petition Date), subject to the rights of creditors (if any) to bring a claim for the payment of additional interest and/or premiums; and

•the holders of general unsecured claims will receive payment in cash in full plus interest at the federal judgment rate from the Petition Date to the date of payment (at such rate in effect as of the Petition Date), subject to the rights of creditors to bring a claim for payment of additional interest.

All of the Hertz Global equity interests existing as of the Effective Date were cancelled on such date in accordance with the Plan of Reorganization with existing equity holders receiving (i) cash in the amount of $1.53 per share of existing interests, (ii) their pro rata share of 3 percent of the common shares of reorganized Hertz Global, subject to dilution, and (iii) either new 30-year public warrants (the " Public Warrants"), for in the aggregate of up to 18% of reorganized Hertz Global common stock issued and outstanding on the Effective Date, subject to dilution and certain conditions, or subscription rights to participate in the Rights Offering as disclosed below.

In accordance with the Plan of Reorganization, Hertz Global commenced a Rights Offering, under which eligible holders of Hertz Global's common stock and certain eligible holders of the Company's Senior Notes and lenders under the Alternative Letter of Credit Facility could purchase up to $1.6 billion of shares of reorganized Hertz Global common stock at a purchase price of $10.00 per share. Pursuant to the EPCA, certain parties agreed to purchase all unsubscribed shares in the Rights Offering (the "Backstop Parties"). The final expiration date for the Rights Offering occurred on June 15, 2021, with eligible holders subscribing to purchase 127,362,114 shares (approximately $1.3 billion), with the Backstop Parties to purchase the remaining 36,137,887 shares (approximately $361 million). Hertz Global closed the Rights Offering upon emergence from the Chapter 11 Cases on June 30, 2021. Pursuant to the terms of the EPCA, the Backstop Parties received a backstop fee equal in the amount of $164 million (payable in shares of reorganized Hertz Global common stock valued at $10.00 per share). During the third quarter of 2021, the Company issued additional shares pursuant to the rounding provisions of the Rights Offering for cash proceeds of approximately $4 million at a purchase price of $10.00.

On the Effective Date, in accordance with the Plan of Reorganization, reorganized Hertz Global issued 1,500,000 shares of preferred stock to Apollo and received gross proceeds of $1.5 billion, less a 2% upfront discount and stock issuance fees.

~~Table of Contents~~

~~HERTZ GLOBAL HOLDINGS, INC. AND SUBSIDIARIES~~

~~THE HERTZ CORPORATION AND SUBSIDIARIES~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)~~

~~Unaudited~~

On the Effective Date, in accordance with the Plan of Reorganization, reorganized Hertz Global entered into a public warrant agreement (the "Public Warrant Agreement") and issued 89,049,029 Public Warrants, subject to certain conditions. The Public Warrants are exercisable from the date of issuance until June 30, 2051 at which time all unexercised Public Warrants will expire and the rights of the holders of such expired Public Warrants will terminate. The Public Warrants had an initial exercise price of $13.80 and are subject to adjustment from time to time upon the occurrence of any payments of cash dividends, certain dilutive events, and recurring fair value adjustments ( See Note 13, "Fair Value Measurements.").

See Note 10, "Equity, Mezzanine Equity and Earnings (Loss) Per Share – Hertz Global," and Note 11, "Public Warrants – Hertz Global," for additional information on the new equity and Public Warrants issued upon the Company's Chapter 11 emergence.

On the Effective Date, the reorganized Company entered into exit credit facilities in an aggregate amount of $2.8 billion comprised of senior secured term loan facilities in an aggregate principal amount of $1.5 billion plus a senior secured revolving credit facility (the "First Lien RCF") in an aggregate committed amount of $1.3 billion. Additionally, the reorganized Company entered into a new ABS facility program ("HVF III") with an aggregate principal amount of $6.8 billion comprised of variable funding notes with a principal amount up to $2.8 billion and medium term notes in an aggregate principal amount of $4.0 billion. On the Effective Date, substantially all existing non-vehicle debt and all existing ABS facilities under the HVF II U.S. ABS Program were repaid in full and terminated in accordance with the Plan of Reorganization. See Note 6, "Debt," for additional information.

~~Going Concern~~

The accompanying unaudited condensed consolidated financial statements have been prepared assuming that the Company will continue as a going concern and contemplate the realization of assets and the satisfaction of liabilities in the normal course of business. During the Chapter 11 Cases, the Company’s ability to continue as a going concern was contingent upon the Company’s ability to successfully implement the Company’s Plan of Reorganization, among other factors. As a result of the implementation of the Plan of Reorganization, management believes there is no longer substantial doubt about the Company's ability to continue as a going concern.

Note 2—Basis of Presentation ~~and Recently Issued Accounting Pronouncements~~

Basis of Presentation

This Quarterly Report on Form 10-Q combines the quarterly reports on Form 10-Q for the quarterly period ended ~~September~~June 30, ~~2021~~2022 of Hertz Global and Hertz. Hertz Global consolidates Hertz for financial statement purposes, therefore, disclosures that relate to activities of Hertz also apply to Hertz Global. In the sections that combine disclosure of Hertz Global and Hertz, this report refers to actions as being actions of the Company, or Hertz Global, which is appropriate because the business is one enterprise and Hertz Global operates the business through Hertz. When appropriate, Hertz Global and Hertz are named specifically for their individual disclosures and any significant differences between the operations and results of Hertz Global and Hertz are separately disclosed and explained.

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the U.S. (“U.S. GAAP”). In the opinion of management, the unaudited condensed consolidated financial statements reflect all adjustments of a normal recurring nature that are necessary for a fair presentation of the results for the interim periods presented. Interim results are not necessarily indicative of results for a full year. The Company's vehicle rental operations are typically a seasonal business, with decreased levels of business in the winter months and heightened activity during the spring and summer months for the majority of countries where the Company generates revenues.

~~Effective on the Petition Date, the Company applied Accounting Standards Codification (“ASC”) 852,~~ ~~Reorganizations~~ (“Topic 852”) which requires the financial statements, for periods subsequent to the commencement of the Chapter 11 Cases, to distinguish transactions and events that are directly associated with the reorganization from the ongoing operations of the business. Accordingly, pre-petition obligations of the Debtors that

~~Table of Contents~~

~~HERTZ GLOBAL HOLDINGS, INC. AND SUBSIDIARIES~~

~~THE HERTZ CORPORATION AND SUBSIDIARIES~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)~~

~~Unaudited~~

could be impacted by the Chapter 11 Cases were classified as liabilities subject to compromise in the accompanying unaudited condensed consolidated balance sheet as of December 31, 2020. These liabilities were reported at the amounts the Company anticipated would be allowed by the Bankruptcy Court, even if they could be settled for lesser amounts. See Note 17, "Liabilities Subject to Compromise," for additional information. In addition, certainCertain charges related to the Chapter 11 Cases were recorded as reorganization items, net in the accompanying unaudited condensed consolidated statements of operations for the ~~nine~~three and six months ended ~~September~~June 30, 2021 ~~and~~pursuant to the ~~three and nine months ended September 30, 2020, respectively.~~provisions of Accounting Standards Codification (“ASC”) 852, Reorganizations. See Note ~~18,~~15, "Reorganization Items, Net," for additional information.

Under Topic 852, companies must apply “fresh-start” accounting rules upon emergence from Chapter 11 reorganization if certain conditions are met. The Company did not qualify for "fresh-start" accounting under Topic 852 upon emergence from Chapter 11.

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and footnotes. Actual results could differ materially from those estimates.

The December 31, ~~2020~~2021 unaudited condensed consolidated balance sheet data is derived from the audited financial statements at that date but does not include all disclosures required by U.S. GAAP. The information included in this

Table of Contents

HERTZ GLOBAL HOLDINGS, INC. AND SUBSIDIARIES

THE HERTZ CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

Unaudited

Quarterly Report on Form 10-Q should be read in conjunction with information included in the Company's Form 10-K for the year ended December 31, ~~2020~~2021 (the ~~"2020~~"2021 Form 10-K"), as filed with the Securities and Exchange Commission ("SEC") on February ~~26, 2021.~~

In connection with the Chapter 11 Emergence and how the Company's chief operating decision maker ("CODM") regularly reviews operating results and allocates resources, the Company modified its reportable segments during the second quarter of 2021, as disclosed in Note 16, "Segment Information."

~~Certain prior period amounts have been reclassified to conform with current period presentation.~~23, 2022.

Principles of Consolidation

The unaudited condensed consolidated financial statements of Hertz Global include the accounts of Hertz Global, its wholly owned and majority owned U.S. and international subsidiaries and its VIEs, as applicable. The unaudited condensed consolidated financial statements of Hertz include the accounts of Hertz, its wholly owned and majority owned U.S. and international subsidiaries and its VIEs, as applicable. The Company consolidates a VIE when it is deemed the primary beneficiary of the VIE. The Company accounts for its investment in joint ventures using the equity method when it has significant influence but not control and is not the primary beneficiary of the joint venture. All significant intercompany transactions have been eliminated in consolidation.

~~Recently Issued Accounting Pronouncements~~

Note 3—Divestitures

~~Adopted~~Donlen Sale

~~Scope~~On March 30, 2021, the Company completed the sale of ~~Reference Rate Reform~~substantially all of the assets and certain liabilities of its Donlen subsidiary. The proceeds from the sale were subject to certain post-closing adjustments in the second quarter of 2021 based on the level of assumed indebtedness, working capital and fleet equity. In the three and six months ended June 30, 2021, the Company recognized a pre-tax gain in its corporate operations of $8 million and $400 million, net of the impact of foreign currency adjustments, respectively, based on the difference in cash proceeds received of $891 million and $543 million net book value of assets sold plus a $53 million receivable in connection with the sale where cash proceeds were received in September 2021.

~~In January 2021,~~

Note 4—Revenue Earning Vehicles

The components of revenue earning vehicles, net are as follows:



(In millions)	June 30, 2022		December 31, 2021
Revenue earning vehicles	$	13,477	$	10,506
Less accumulated depreciation	(1,525)		(1,518)
	11,952		8,988
Revenue earning vehicles held for sale, net(1)	378		238
Revenue earning vehicles, net	$	12,330	$	9,226

(1) Represents the ~~Financial Accounting Standards Board ("FASB") issued guidance that clarifies that entities with derivative instruments affected by changes to~~carrying amount of vehicles currently placed on the ~~interest rates used~~Company's retail lots for ~~discounting, margining~~sale or ~~contract price alignment due to reference rate reform may elect to apply certain optional expedients~~actively in the process of being sold through other disposition channels.

Depreciation of revenue earning vehicles and ~~exceptions, including contract modification relief, provided in Topic 848. Entities may elect to apply~~lease charges, net includes the guidance on contract modifications either (1) retrospectively as of any date from the beginning of any interim period that includes March 12, 2020 or (2) prospectively to new modifications from any date in an interim period that includes or is after January 7, 2021, up to the date that financial statements are available to be issued. The Company will apply the guidance prospectively, as applicable, and does not expect a material impact on its financial position, results of operations or cash flows.following:


	Three Months Ended June 30,				Six Months Ended June 30,
(In millions)	2022		2021		2022		2021
Depreciation of revenue earning vehicles	$	432	$	167	$	754	$	432
(Gain) loss on disposal of revenue earning vehicles	(331)		(60)		(718)		(93)
Rents paid for vehicles leased	5		9		11		20
Depreciation of revenue earning vehicles and lease charges, net	$	106	$	116	$	47	$	359

1716

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HERTZ GLOBAL HOLDINGS, INC. AND SUBSIDIARIES

THE HERTZ CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

Unaudited

Note ~~3—Divestitures~~

~~Donlen Sale~~

On March 30, 2021, the Company completed the previously announced Donlen Sale. The proceeds from the sale were subject to certain post-closing adjustments in the second quarter of 2021 based on the level of assumed indebtedness, working capital and fleet equity. In the nine months ended September 30, 2021, the Company recognized a pre-tax gain in its corporate operations of $400 million, net of the impact of foreign currency adjustments, based on the difference in cash proceeds received of $891 million less $543 million net book value of assets sold plus a $53 million receivable in connection with the sale where cash proceeds were received in September 2021. On March 30, 2021, the Company and the buyer entered into a transition services agreement ("TSA") which provides for certain transitional services in connection with the Donlen Sale.

~~Sale of Non-vehicle Capital Assets~~

During the first quarter of 2020, the Company received additional cash from the sale of certain non-vehicle capital assets in its Americas Rental Car segment, which was completed in the fourth quarter of 2019, and recognized an additional $20 million pre-tax gain on the sale, which is included in other (income) expense, net in the accompanying unaudited condensed consolidated statement of operations for the nine months ended September 30, 2021.

~~Sale of Marketable Securities~~

During the first quarter of 2020, the Company sold marketable securities for $74 million and recognized an immaterial gain on the sale in its corporate operations, which is included in other (income) expense, net in the accompanying unaudited condensed consolidated statement of operations for the nine months ended September 30, 2020.

~~Note 4—Revenue Earning Vehicles~~5—Debt

The ~~components~~Company's debt, including its available credit facilities, consists of ~~revenue earning vehicles, net are~~the following ($ in millions) as ~~follows:~~of June 30, 2022 and December 31, 2021:

(In millions) September 30,
2021 December 31,
2020
Revenue earning vehicles $ 9,751 $ 7,492
Less accumulated depreciation (1,526) (1,467)
8,225 6,025
Revenue earning vehicles held for sale, net(1)
338 37
Revenue earning vehicles, net $ 8,563 $ 6,062

~~(1) Represents the carrying amount of vehicles currently placed on the Company's retail lots for sale or actively in the process of being sold through other disposition channels.~~

~~Note 5—Goodwill and Intangible Assets, Net~~

~~Recoverability of Goodwill and Indefinite-lived Intangible Assets~~

The Company tests the recoverability of its goodwill and indefinite-lived intangible assets by performing an impairment analysis on an annual basis, as of October 1, and at interim periods when circumstances require as a result of a triggering event, as defined by ASC 350 – Intangibles, Goodwill and Other (“Topic 350”).

As of March 31, 2021, the Company quantitatively tested the recoverability of its goodwill and indefinite-lived intangible assets in the International RAC segment due to continued adverse impacts from COVID-19 and the



Facility	Weighted-Average Interest Rate as of June 30, 2022	Fixed or Floating Interest Rate	Maturity	June 30, 2022		December 31, 2021
Non-Vehicle Debt
Term B Loan	4.33%	Floating	6/2028	$	1,287	$	1,294
Term C Loan	4.33%	Floating	6/2028	245		245
Senior Notes Due 2026	4.63%	Fixed	12/2026	500		500
Senior Notes Due 2029	5.00%	Fixed	12/2029	1,000		1,000
First Lien RCF	N/A	Floating	6/2026	—		—
Other Non-Vehicle Debt(1)	7.98%	Fixed	Various	13		16
Unamortized Debt Issuance Costs and Net (Discount) Premium				(64)		(69)
Total Non-Vehicle Debt				2,981		2,986
Vehicle Debt
HVF III U.S. ABS Program
HVF III U.S. Vehicle Variable Funding Notes
HVF III Series 2021-A Class A(2)	2.88%	Floating	6/2024	2,273		2,813
HVF III Series 2021-A Class B(2)	3.65%	Fixed	6/2023	188		188
				2,461		3,001
HVF III U.S. Vehicle Medium Term Notes
HVF III Series 2021-1(2)	1.66%	Fixed	12/2024	2,000		2,000
HVF III Series 2021-2(2)	2.12%	Fixed	12/2026	2,000		2,000
HVF III Series 2022-1(2)	2.07%	Fixed	6/2025	653		—
HVF III Series 2022-2(2)	2.42%	Fixed	6/2027	653		—
HVF III Series 2022-3(2)	3.53%	Fixed	3/2024	333		—
HVF III Series 2022-4(2)	3.87%	Fixed	9/2025	580		—
HVF III Series 2022-5(2)	4.03%	Fixed	9/2027	317		—
				6,536		4,000
Vehicle Debt - Other
Repurchase Facility	3.03%	Fixed	7/2022	236		—
European ABS(2)	1.80%	Floating	10/2023	510		395
Hertz Canadian Securitization(2)	3.77%	Floating	6/2024	326		191
Australian Securitization(2)	2.74%	Floating	4/2024	140		128
New Zealand RCF	5.12%	Floating	6/2024	37		39
U.K. Financing Facility	4.75%	Floating	7/2022-6/2026	107		98
U.K. Toyota Financing Facility	2.20%	Floating	8/2022-2/2023	27		9
Other Vehicle Debt	2.93%	Floating	7/2022-4/2025	82		93
				1,465		953

1817

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HERTZ GLOBAL HOLDINGS, INC. AND SUBSIDIARIES

THE HERTZ CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

Unaudited

~~Company's reduction~~



Facility	Weighted-Average Interest Rate as of June 30, 2022	Fixed or Floating Interest Rate	Maturity	June 30, 2022		December 31, 2021
Unamortized Debt Issuance Costs and Net (Discount) Premium				(51)		(33)
Total Vehicle Debt				10,411		7,921
Total Debt				$	13,392	$	10,907

(1)Other non-vehicle debt is primarily comprised of $9 million and $12 million in cash flow projections. Based on the quantitative tests, no impairments were recorded in the first quarter of 2021. However, the fair value of certain tradenames, which are indefinite-lived intangible assets, were in excess by 6% of the carrying value of $540 million.

finance lease obligations

As as of June 30, ~~2021, the Company determined that the projected revenues, expenses~~2022 and cash flows, reflecting the expected duration and extent of impact to its business, customers, economy and the travel industry from COVID-19, and the impact of the Chapter 11 Cases, were materially consistent with the assumptions utilized in the Company’s MarchDecember 31, 2021, quantitative impairment assessment. As a result of the foregoing considerations, along with the consideration of other indicators noted in Topic 350, the Company concluded there were no indicators of impairment triggered for the Americas RAC or International RAC segments in the second quarter of 2021.

As of September 30, 2021, the Company determined that the projected revenues, expenses and cash flows, reflecting the expected duration and extent of impact to its business, customers, economy and the travel industry from COVID-19 were materially consistent with the assumptions utilized in the Company’s March 31, 2021 quantitative impairment assessment. As a result of the foregoing considerations, along with the consideration of other indicators noted in Topic 350, the Company concluded there were no indicators of impairment triggered for the Americas RAC or International RAC segments in the third quarter of 2021.

Further deterioration in the general economic conditions in the travel industry, the Company’s cash flows and the Company's ability to obtain future financing to maintain its fleet or the weighted average cost of capital assumptions may result in an impairment charge to earnings in future quarters. The Company will continue to closely monitor actual results versus its expectations, market events or conditions, including the impact of COVID-19 on the Company's business and the travel industry, and the resulting impact to its assumptions about future estimated cash flows and the weighted average cost of capital. If the Company's expectations of the operating results, both in magnitude or timing, do not materialize, or if its weighted average cost of capital increases, the Company may be required to record goodwill and indefinite-lived intangible asset impairment charges, which could be material.

~~Note 6—Debt~~

~~The Company's debt, including its available credit facilities, consists of the following ($ in millions):~~

Facility Weighted-Average Interest Rate
as of
September 30, 2021 Fixed or
Floating
Interest
Rate Maturity September 30,
2021 December 31,
2020
Non-Vehicle Debt
Term B Loan 4.00% Floating 6/2028 $ 1,297 $ —
Term C Loan 4.00% Floating 6/2028 245 —
First Lien RCF N/A Floating 6/2026 — —
Other Non-Vehicle Debt 8.53% Fixed Various 14 18
Senior Secured Superpriority Debtor-in-Possession Credit Agreement N/A N/A N/A — 250
Unamortized Debt Issuance Costs and Net (Discount) Premium (45) (25)
Total Non-Vehicle Debt Not Subject to Compromise 1,511 243
Non-Vehicle Debt Subject to Compromise
Senior Term Loan N/A N/A N/A — 656
Senior RCF N/A N/A N/A — 615
Senior Notes(1)
N/A N/A N/A — 2,700
Senior Second Priority Secured Notes N/A N/A N/A — 350
Promissory Notes N/A N/A N/A — 27

~~Table of Contents~~

~~HERTZ GLOBAL HOLDINGS, INC. AND SUBSIDIARIES~~

~~THE HERTZ CORPORATION AND SUBSIDIARIES~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)~~

~~Unaudited~~

Facility Weighted-Average Interest Rate
as of
September 30, 2021 Fixed or
Floating
Interest
Rate Maturity September 30,
2021 December 31,
2020
Alternative Letter of Credit Facility(2)
N/A N/A N/A — 114
Senior RCF Letter of Credit Facility N/A N/A N/A — 17
Unamortized Debt Issuance Costs and Net (Discount) Premium — (36)
Total Non-Vehicle Debt Subject to Compromise — 4,443
Vehicle Debt
HVF III U.S. ABS Program
HVF III U.S. Vehicle Variable Funding Notes
HVF III Series 2021-A(3)
1.63% Floating 06/2023 2,270 —
2,270 —
HVF III U.S. Vehicle Medium Term Notes
HVF III Series 2021-1(3)
1.66% Fixed 12/2024 2,000 —
HVF III Series 2021-2(3)
2.12% Fixed 12/2026 2,000 —
4,000 —
HVF II U.S. ABS Program
HVF II U.S. Vehicle Variable Funding Notes
HVF II Series 2013-A(4)
N/A N/A N/A — 1,940
— 1,940
HVF II U.S. Vehicle Medium Term Notes
HVF II Series 2015-3 N/A N/A N/A — 163
HVF II Series 2016-2 N/A N/A N/A — 263
HVF II Series 2016-4 N/A N/A N/A — 187
HVF II Series 2017-1 N/A N/A N/A — 199
HVF II Series 2017-2 N/A N/A N/A — 164
HVF II Series 2018-1 N/A N/A N/A — 468
HVF II Series 2018-2 N/A N/A N/A — 94
HVF II Series 2018-3 N/A N/A N/A — 95
HVF II Series 2019-1 N/A N/A N/A — 330
HVF II Series 2019-2 N/A N/A N/A — 354
HVF II Series 2019-3 N/A N/A N/A — 352
— 2,669
Vehicle Debt - Other
European Vehicle Notes(5)
N/A N/A N/A — 888
European ABS(3)
2.50% Floating 4/2022 401 263
Hertz Canadian Securitization(3)
2.44% Floating 1/2023 206 53
Australian Securitization(3)
1.66% Floating 4/2022 112 97
New Zealand RCF 3.13% Floating 6/2022 37 35
U.K. Financing Facility 3.59% Floating 10/2021-8/2024 111 105
U.K. Toyota Financing Facility 2.20% Floating 10/2021-3/2022 13 —
Other Vehicle Debt 2.90% Floating 10/2021-11/2024 91 37
971 1,478

~~Table of Contents~~

~~HERTZ GLOBAL HOLDINGS, INC. AND SUBSIDIARIES~~

~~THE HERTZ CORPORATION AND SUBSIDIARIES~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)~~

~~Unaudited~~

Facility Weighted-Average Interest Rate
as of
September 30, 2021 Fixed or
Floating
Interest
Rate Maturity September 30,
2021 December 31,
2020
Unamortized Debt Issuance Costs and Net (Discount) Premium (34) (63)
Total Vehicle Debt Not Subject to Compromise 7,207 6,024
Total Debt Not Subject to Compromise $ 8,718 $ 6,267

respectively.

~~(1)~~References to the "Senior Notes" include the series of Hertz's unsecured senior notes set forth in the table below which were included in liabilities subject to compromise in the accompanying unaudited condensed consolidated balance sheets as of December 31, 2020. On the Effective Date, in accordance with the Plan of Reorganization, the Senior Notes were repaid in full and terminated. On July 1, 2021, Wells Fargo Bank, National Association as indenture trustee for the Senior Notes, filed a complaint against Hertz and certain of its subsidiaries requesting declaratory judgement that additional amounts are owed with respect to certain premiums and post-petition interest with respect to the Senior Notes. Hertz disputes that any such amounts are owed and on August 2, 2021 filed a motion to dismiss the complaint. See Note 14, "Contingencies and Off-Balance Sheet Commitments" for additional information.


~~(In millions)~~	~~Outstanding Principal~~

~~Senior Notes~~	~~September 30, 2021~~		~~December 31, 2020~~
~~6.250% Senior Notes due October 2022~~	$	—	$	~~500~~
~~5.500% Senior Notes due October 2024~~	—		~~800~~
~~7.125% Senior Notes due August 2026~~	—		~~500~~
~~6.000% Senior Notes due January 2028~~	—		~~900~~
	$	—	$	~~2,700~~

(2)~~Includes default interest as of December 31, 2020.~~

~~(3)~~Maturity reference is to the earlier "expected final maturity date" as opposed to the subsequent "legal final maturity date." The expected final maturity date is the date by which Hertz and investors in the relevant indebtedness originally expect the outstanding principal of the relevant indebtedness to be repaid in full. The legal final maturity date is the date on which the outstanding principal of the relevant indebtedness is legally due and payable in full.

~~(4)Includes default interest as of December 31, 2020, which is comprised of an increase in the contractual spread.~~

~~(5)~~References to the "European Vehicle Notes" include the series of Hertz Holdings Netherlands B.V.'s, an indirect wholly-owned subsidiary of Hertz organized under the laws of the Netherlands, ("Hertz Netherlands") unsecured senior notes (converted from Euros to U.S. Dollars at a rate of 1.22 to 1 as of December 31, 2020), set forth in the table below. On the Effective Date, in accordance with the Plan of Reorganization, the European Vehicle Notes were repaid in full and cancelled.


~~(In millions)~~	~~Outstanding Principal~~

~~European Vehicle Notes~~	~~September 30, 2021~~		~~December 31, 2020~~
~~4.125% Senior Notes due October 2021~~	$	—	$	~~276~~
~~5.500% Senior Notes due March 2023~~	—		~~612~~
	$	—	$	~~888~~

~~Chapter 11 and Emergence~~

As a result of filing the Chapter 11 Cases, as disclosed in Note 1, "Background," the Company reclassified certain of its non-vehicle debt instruments, net of deferred financing costs, discounts and premiums, as applicable, to liabilities subject to compromise in the accompanying unaudited condensed consolidated balance sheets as of December 31, 2020.

The filing of the Chapter 11 Cases constituted an event of default that accelerated the Debtors’ obligations under the Senior Term Loan, the Senior RCF, the Letter of Credit Facility and the Alternative Letter of Credit Facility. Additionally, the filing triggered defaults, termination events and/or amortization events under certain obligations of (i) Hertz International Limited ("HIL"), Hertz Netherlands and the direct and indirect subsidiary companies located outside of the United States and Canada (collectively the "International Subsidiaries"), some of which were waived

~~Table of Contents~~

~~HERTZ GLOBAL HOLDINGS, INC. AND SUBSIDIARIES~~

~~THE HERTZ CORPORATION AND SUBSIDIARIES~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)~~

~~Unaudited~~

~~or amended subject to certain time limitations, and (ii) HVF, HVF II and certain other vehicle financing subsidiaries (collectively the "Non-Debtor Financing Subsidiaries").~~

As disclosed in Note 1, "Background," on May 14, 2021, the Debtors filed the Plan of Reorganization with the Bankruptcy Court, which was confirmed by the Bankruptcy Court on June 10, 2021. On the Effective Date, the Company emerged from Chapter 11 as disclosed in Note 1, "Background" and, in accordance with the Plan of Reorganization, substantially all existing non-vehicle debt and all existing ABS facilities under the HVF II U.S. ABS Program and the HVIF U.S. ABS Program were repaid in full and cancelled, as further disclosed below. Upon the Debtor's emergence from Chapter 11 and the associated debt payoffs, any events of default, termination and/or amortization events ceased to exist.

~~Non-Vehicle~~Non-vehicle Debt

~~First Lien Credit Agreement~~

~~Pursuant to~~In March 2022, Hertz increased the ~~Plan of Reorganization, on the Effective Date, Hertz entered into a credit agreement (the "First Lien Credit Agreement") that provides for the following:~~

•~~a term loan "B" facility (the "Term B Loan") for term loans in an~~ aggregate ~~principal~~committed amount of ~~$1.3 billion;~~

•~~a term loan "C" facility (the "Term C Loan") for term loans that are available to cash collateralize letters of credit in an aggregate principal amount of $245 million; and~~

•the First Lien RCF from $1.3 billion to $1.5 billion and the sublimit for ~~revolving loans and~~ letters of credit upfrom $1.1 billion to ~~an aggregate principal amount of $1.3 billion.~~

Proceeds received on the Effective Date, as a result of the Plan of Reorganization, under the First Lien Credit Agreement were used to (i) repay certain existing indebtedness of the Debtors; (ii) pay fees, expenses$1.4 billion and costs associated with the consummation of the Plan of Reorganization; (iii) fund distributions required in connection with the Plan of Reorganization; (iv) provide funds for working capital and general corporate purposes; and (v) backstop or replace existing letters of credit.

~~Term B Loan and Term C Loan (collectively, the "Term Loans")~~: The Term Loans bear interest based on an alternate base rate as per the First Lien Credit Agreement or adjusted LIBOR, in each case plus an initial applicable margin of (i) 2.50% in the case of the alternate base rate, or (ii) 3.50% in the case of the adjusted LIBOR. In each case, the margin may decrease depending on Hertz's consolidated total corporate leverage ratio, as defined in the First Lien Credit Agreement (the "Total Corporate Leverage Ratio"). The First Lien Credit Agreement requires the Term B Loan to be repaid in quarterly installments of $3.3 million per quarter beginning on September 30, 2021 until maturity. The Term Loans mature on June 30, 2028.

~~First Lien RCF~~: The First Lien RCF bears interest, at a benchmark rate plus spread. Loans under the facility are available in various currencies including USD, Eurodollar, Australian dollar, Canadian dollar and Sterling. Benchmark rates for the relevant currencies include, the relevant LIBOR rate, the Prime rate, the Bank Bill Swap Reference Bid Rate for Australian dollars, Canadian prime rate, an adjusted Canadian Dollar Offered Rate ("CDOR") or the Daily Simple Sterling Overnight Index Average ("SONIA"). ABR Loans and Canadian Prime Rate Loans, as defined under the First Lien Credit Agreement, bear interest at the relevant benchmark rate plus an initial applicable margin of 2.50%. The margin for Eurocurency Loans (including USD loans), SONIA loans and Canadian dollar BA Equivalent Loans, as defined in the First Lien Credit Agreement, is dependent upon the Company's Consolidated Total Corporate Leverage Ratio, as defined under the First Lien Credit Agreement. As of September 30, 2021, that margin was 3.50%. In each case, the margin may decrease depending on Hertz’s Total Corporate Leverage Ratio. The First Lien Credit Agreement requiresamended the First Lien RCF to ~~be repaid in quarterly installments beginning on September 30, 2021 until maturity. The First Lien RCF matures on June 30, 2026.~~

~~Table of Contents~~

~~HERTZ GLOBAL HOLDINGS, INC. AND SUBSIDIARIES~~

~~THE HERTZ CORPORATION AND SUBSIDIARIES~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)~~

~~Unaudited~~

~~Senior~~change the benchmark from USD LIBOR to the Secured ~~Superpriority Debtor-in-Possession Credit Agreement~~Overnight Financing Rate ("~~DIP Credit Agreement")~~

~~On the Effective Date, in accordance with the Plan of Reorganization, the DIP Credit Agreement was paid in full and terminated.~~

~~Senior Facilities~~

On the Effective Date, in accordance with the Plan of Reorganization, the Senior Term Loan, the Senior RCF and drawn amounts under the Senior RCF Letter of Credit Facility and Letter of Credit Facility were paid in full and terminated.

~~Senior Notes and Senior Second Priority Secured Notes~~

~~On the Effective Date, in accordance with the Plan of Reorganization, the Company's Senior Notes and Senior Second Priority Secured Notes were paid in full and terminated.~~

~~Promissory Notes~~

~~On the Effective Date, in accordance with the Plan of Reorganization, the Promissory Notes were paid in full and terminated.~~

~~Alternative Letter of Credit Facility~~

~~On the Effective Date, in accordance with the Plan of Reorganization, the Alternative Letter of Credit Facility was paid in full and terminated.~~

~~HIL Credit Agreement~~

~~In April 2021, Hertz International Limited ("HIL"~~SOFR") ~~entered into a multi-draw term loan facility (the "HIL Credit Agreement") which provided an aggregate maximum principal of €250 million to meet the liquidity requirements of the European business.~~based rate.

In May ~~2021, resulting from a change in~~2022, Hertz increased the Company's plan of reorganization sponsorship, the HIL Credit Agreement was terminated and HIL entered into a new multi-draw term loan facility (the "Second HIL Credit Agreement") which also provided for an aggregate ~~maximum principal of ��257 million that was funded by certain~~committed amount of the ~~Plan Sponsors. On~~First Lien RCF from $1.5 billion to $1.7 billion and the ~~Effective Date, in accordance with the Plan~~sublimit for letters of ~~Reorganization, the Second HIL Credit Agreement was paid in full and terminated.~~credit from $1.4 billion to $1.6 billion.

In June 2022, Hertz increased the aggregate committed amount of the First Lien RCF from $1.7 billion to $1.9 billion and the sublimit for letters of credit from $1.6 billion to $1.8 billion.

In July 2022, Hertz increased the aggregate committed amount of the First Lien RCF by $55 million where the aggregate committed amount remains at $1.9 billion and the sublimit for letters of credit by $55 million where the aggregate sublimit remains at $1.8 billion.

Vehicle Debt

HVF III U.S. ABS Program

In June 2021, Hertz established a securitization platform, the HVF III U.S. ABS Program, to facilitate its financing activities relating to vehicles used by Hertz in the U.S. daily vehicle rental operations. Hertz Vehicle Financing III LLC ("HVF III"), a wholly-owned, special-purpose and bankruptcy remote subsidiary of Hertz, is the issuer of variable funding notes and medium term notes under the HVF III U.S. ABS Program. HVF III has entered into a base indenture that permits it to issue term and variable funding rental car asset-backed securities, secured by a collateral pool consisting primarily of the rental vehicles used in the Company's U.S. vehicle rental operations and the related incentive and repurchase program vehicle receivables. Within each series of HVF III U.S. Vehicle Medium Term Notes, the issued notes are subordinated based on class.

Pursuant to the Plan of Reorganization, in June 2021, HVF III issued Series 2021-A Variable Funding Rental Car Asset Backed Notes (the "Series 2021-A Notes"), the Series 2021-1 Fixed Rate Rental Car Asset Backed Notes

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~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)~~

~~Unaudited~~

(the "Series 2021-1 Notes") and the Series 2021-2 Fixed Rate Rental Car Asset Backed Notes (the "Series 2021-2 Notes" and, together with the Series 2021-A Notes and the Series 2021-1 Notes, the “HVF III ABS Notes”).

HVF III Series 2021-A ~~Notes:~~Notes: In ~~June 2021, Hertz issued~~March 2022, an increase to the commitments for the Series 2021-A Notes ~~with a~~was made, increasing the maximum principal amount ~~of up~~that may be outstanding from $3.0 billion to ~~$2.8~~$3.2 billion.

In May 2022, an increase to the commitments for the Series 2021-A Notes was made, increasing the maximum principal amount that may be outstanding from $3.2 billion ~~and a~~to $3.6 billion.

In June 2022, an increase to the commitments for the Series 2021-A Notes was made, increasing the maximum principal amount that may be outstanding from $3.6 billion to $3.8 billion. Additionally, the maturity date of the Series 2021-A Notes Class A Notes was extended to June ~~2023.~~2024.

In July 2022, an increase to the commitments for the Series 2021-A Notes was made, increasing the maximum principal amount that may be outstanding from $3.8 billion to $3.9 billion.

HVF III Series ~~2021-1~~2022-1 Notes: ~~On the Effective Date,~~In January 2022, Hertz issued the Series ~~2021-1~~2022-1 Notes in four classes (Class A, Class B, Class C and Class D) in an aggregate principal amount of ~~$2.0 billion. There is subordination within the Series 2021-1 Notes based on class.~~$750 million.

HVF III Series ~~2021-2 Notes:~~ 2022-2 Notes~~On the Effective Date,~~: In January 2022, Hertz issued the Series ~~2021-2~~2022-2 Notes in four classes (Class A, Class B, Class C and Class D) in an aggregate principal amount of ~~$2.0 billion. There is subordination within the Series 2021-2 Notes based on class.~~$750 million.

In June 2021, in connection with the issuance of the HVF III ABS Notes, Hertz entered into a new Master Motor Vehicle Operating Lease and Servicing Agreement (the “Operating Lease”) among HVF III, as lessor, Hertz, as a lessee, servicer and guarantor, DTG Operations, Inc., a wholly-owned subsidiary of the Company, as a lessee and other permitted lessees (together with Hertz and DTG Operations, Inc., the "Lessees"), pursuant to which HVF III will lease vehicles to the Lessees.

Proceeds received upon issuance from the HVF III ABS Notes were used to fund the purchases of certain vehicles and for the repayment in full of (i) approximately $3.5 billion in aggregate outstanding principal of notes issued by HVF II, as described below, and (ii) approximately $2.2 billion in aggregate outstanding principal of notes issued by Hertz Vehicle Interim Financing, a direct wholly-owned bankruptcy remote subsidiary of Hertz ("HVIF"). The manufacturer rebates associated with HVF and HVIF were transferred to HVF III as part of the purchase agreements with HVF and HVIF. Any remaining funds are expected to be used for the future purchase or refinancing of vehicles to be leased under the Operating Lease.

~~HVF II U.S. ABS Program~~

On the Effective Date, in accordance with the Plan of Reorganization, all HVF II U.S. Vehicle Medium Term Notes and HVF II Variable Funding Notes were paid in full and terminated. Any and all outstanding Bankruptcy Court orders and other agreements relating to HVF II were terminated on the Effective Date as a result of the termination of the notes.

~~HVIF U.S. ABS Program~~

~~On the Effective Date, in accordance with the Plan of Reorganization, the HVIF Series 2020-1 was paid in full and terminated.~~

~~Vehicle Debt-Other~~

~~European Vehicle Notes~~

~~On the Effective Date, in accordance with the Plan of Reorganization, the European Vehicle Notes were paid in full and terminated.~~

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Unaudited

~~European ABS~~HVF III Series 2022-3 Notes: In March 2022, Hertz issued the Series 2022-3 Notes in four classes (Class A, Class B, Class C and Class D) in an aggregate principal amount of $383 million.

HVF III Series 2022-4 Notes: In March 2022, Hertz issued the Series 2022-4 Notes in four classes (Class A, Class B, Class C and Class D) in an aggregate principal amount of $667 million.

HVF III Series 2022-5 Notes: In March 2022, Hertz issued the Series 2022-5 Notes in four classes (Class A, Class B, Class C and Class D) in an aggregate principal amount of $364 million.

There is subordination within each of the preceding series based on class.

HVF III Various Series 2022 Class D Notes: At the time of the respective HVF III initial offerings disclosed above, Hertz, an affiliate of HVF III, purchased the Class D Notes. Accordingly, the related principal amounts below are eliminated in consolidation as of June 30, 2022.


(In millions)	Aggregate Principal Amount

HVF III Series 2022-1 Class D Notes	$	98
HVF III Series 2022-2 Class D Notes	98
HVF III Series 2022-3 Class D Notes	50
HVF III Series 2022-4 Class D Notes	87
HVF III Series 2022-5 Class D Notes	47
Total	$	380

In ~~April 2021, International Fleet Financing No. 2 BV ("IFF No. 2")~~July 2022, $81 million of the Series 2022-1 and all of the Series 2022-3 Class D Notes were sold by Hertz to third parties.

Vehicle Debt-Other

Repurchase Facility

In June 2022, Hertz entered into a comprehensive restructuring of the European ABS. The terms of the restructured European ABS provide for aggregate maximum borrowings of €450 million and extend the maturity to April 2022. In accordance with the Plan of Reorganization, the guarantees provided by Hertz relatingrepurchase agreement related to the ~~restructured European ABS, including all contingent claims in respect of~~outstanding HVF III Series 2022 Class D Notes (the "Repurchase Facility"), whereby Hertz may sell the HVF III Series 2022 Class D Notes to the Repurchase Facility counterparty and repurchase such ~~guarantees, were fully released on the Effective Date.~~

~~Hertz Canadian Securitization~~

On January 27, 2021, TCL Funding Limited Partnership, a bankruptcy remote, indirect, wholly-owned, special purpose subsidiary of Hertz, entered into the Funding LP Series 2021-A which provides for aggregate maximum borrowings of CAD$350 million on a revolving basis. Subjectnotes from time to ~~initial availability, the initial draw of CAD$120 million was used, in part, to pay the outstanding obligations~~time. Transactions occurring under the ~~Funding LP Series 2015-A Notes, including any unpaid default interest.~~Repurchase Facility are based on mutually agreeable terms and prevailing rates. As of June 30, 2022, transactions totaling $236 million were outstanding under the Repurchase Facility and such transactions bear interest at a ~~result~~rate of ~~the payoff of the Funding LP Series 2015-A Notes, the Hertz Canadian Securitization amortization event ceased to exist.~~SOFR plus 150 basis points and have a 30-day tenor.

Australian Securitization

~~An amortization event that would have arisen under~~In January 2022, the Australian Securitization ~~as a result of~~was amended to increase the filing of the Chapter 11 Cases was waived in May 2020, and, in June 2021, such waiver has been superseded by an amendment of the Australian Securitization. The terms of the amended Australian Securitization provide for aggregate maximum borrowings ~~of AUD$210~~to AUD250 million and to extend the maturity to April 2022. In accordance with the Plan of Reorganization, the guarantees provided by Hertz relating to the restructured Australian Securitization, including all contingent claims in respect of such guarantees, were fully released on the Effective Date.2024.

New Zealand RCF

In ~~May 2021,~~April 2022, Hertz New Zealand Holdings Limited, an indirect, wholly-owned subsidiary of Hertz, amended its credit agreement to ~~provide for aggregate maximum borrowings of NZD$60 million and to~~ extend the maturity to June ~~2022.~~2024.

U.K. Financing Facility

~~Events of default that would have arisen under~~In April 2022, Hertz U.K. Limited amended the U.K. Financing Facility ~~as a result of filing the Chapter 11 Cases were waived in May 2020 (as amended from time~~ to ~~time), and, in April 2021, such waivers have been superseded by a comprehensive restructuring of the U.K. Financing Facility. The terms of the restructured U.K. Financing Facility~~ provide for aggregate maximum borrowings of up to £120 million, for a seasonal commitment period through October 2022. Following the expiration of the seasonal commitment period, aggregate maximum borrowings will revert to £100 ~~million and extend~~million. Additionally, the ~~maturity to April 2022. In accordance with the Plan of Reorganization, guarantees provided by Hertz relating to the restructured~~ U.K. ~~Financing Facility, including all contingent claims in respect of such guarantees, were fully released on the Effective Date.~~

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Unaudited

Financing Facility was amended to extend the maturity of the aggregate maximum borrowings of £100 million to October 2023.

U.K. Toyota Financing Facility

In ~~May 2021,~~March 2022, Hertz U.K. Limited ~~entered into~~amended the U.K. Toyota Financing Facility to ~~finance~~increase aggregate maximum borrowings from £10 million to £25 million and extended the ~~acquisition~~maturity to October 2022.

Hertz Canadian Securitization

In June 2022, TCL Funding Limited Partnership, a bankruptcy remote, indirect, wholly-owned, special purpose subsidiary of ~~certain motor vehicles which provides~~Hertz, amended the Hertz Canadian Securitization to provide for aggregate maximum borrowings of ~~£10~~CAD$450 million, ~~maturing in December 2021.~~for a seasonal commitment period through November 2022. Following the expiration of the seasonal commitment period, aggregate maximum borrowings will revert to CAD$350 million. Additionally, the Hertz Canadian Securitization was amended to extend the maturity of the aggregate maximum borrowings of CAD$350 million to June 2024.

~~Maturities~~

~~As of September 30, 2021, the nominal amounts of maturities of debt for each of the years ending December 31 are as follows:~~

(In millions) 2021 2022 2023 2024 2025 After 2025
Non-Vehicle Debt $ 5 $ 19 $ 18 $ 14 $ 13 $ 1,487
Vehicle Debt 34 680 2,506 2,021 — 2,000
Total $ 39 $ 699 $ 2,524 $ 2,035 $ 13 $ 3,487

~~As of September 30, 2021, $19 million of non-vehicle debt and $683 million of vehicle debt is set to mature during the twelve months following the issuance of this Quarterly Report on Form 10-Q.~~

~~Loss on Extinguishment of Debt~~

The Company incurred losses in the form of early redemption premiums and/or the write-off of deferred financing costs associated with certain redemptions, terminations and waiver agreements. Loss on extinguishment of debt is presented in reorganization items, net, unless otherwise noted in the table below, in the accompanying unaudited condensed consolidated statements of operations for the nine months ended September 30, 2021.

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~~HERTZ GLOBAL HOLDINGS, INC. AND SUBSIDIARIES~~

~~THE HERTZ CORPORATION AND SUBSIDIARIES~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)~~

~~Unaudited~~

~~The following table reflects the amount of loss for each respective redemption/termination:~~

Three Months Ended
September 30, Nine Months Ended
September 30,
Redemption/Termination (in millions) 2021 2020 2021 2020
Non-Vehicle Debt
HIL Credit Agreement(1)
$ — $ — $ 8 $ —
Second HIL Credit Agreement — — 5 —
Total Non-Vehicle Debt — — 13 —
Non-Vehicle Debt (subject to compromise)
Senior Term Loan — — 16 —
Senior RCF — — 22 —
Senior Notes — — 29 —
Senior Second Priority Secured Notes — — 4 —
Promissory Notes — — 2 —
Alternative Letter of Credit Facility — — 7 —
Letter of Credit Facility — — 8 —
Total Non-Vehicle Debt (subject to compromise) — — 88 —
Vehicle Debt
HVF II U.S. Vehicle Variable Funding Notes — — 9 —
HVF II U.S. Vehicle Medium Term Notes — — 39 —
HVIF Series 2020-1 — — 21 —
European Vehicle Notes — — 29 —
European ABS(2)
— 2 — 5
Total Vehicle Debt — 2 98 5
Total Loss on Extinguishment of Debt $ — $ 2 $ 199 $ 5

(1) The loss on extinguishment associated with the HIL Credit Agreement is recorded in non-vehicle interest expense, net in the accompanying unaudited condensed consolidated statements of operations for the nine months ended September 30, 2021.

(2) The loss on extinguishment associated with the European ABS is recorded in vehicle interest expense, net in the accompanying unaudited condensed consolidated statements of operations for the three and nine ended September 30, 2020.

Borrowing Capacity and Availability

Borrowing capacity and availability comes from the Company's revolving credit facilities, which are a combination of variable funding asset-backed securitization facilities, ~~cash-flow-based~~cash-flow based revolving credit facilities, asset-based revolving credit facilities and the First Lien RCF. Creditors under each such asset-backed securitization facility and asset-based revolving credit facility have a claim on a specific pool of assets as collateral. With respect to each such asset-backed securitization facility and asset-based revolving credit facility, the Company refers to the amount of debt it can borrow given a certain pool of assets as the borrowing base.

The Company refers to "Remaining Capacity" as the maximum principal amount of debt permitted to be outstanding under the respective facility (i.e., with respect to a variable funding asset-backed securitization facility or asset-based revolving credit facility, the amount of debt the Company could borrow assuming it possessed sufficient assets as collateral) less the principal amount of debt then-outstanding under such facility and, in the case of the First Lien RCF, less any issued standby letters of credit. With respect to a variable funding asset-backed securitization facility or asset-based revolving credit facility, the Company refers to "Availability Under Borrowing Base Limitation" as the lower of Remaining Capacity or the borrowing base less the principal amount of debt then-outstanding under such facility (i.e., the amount of debt that can be borrowed given the collateral possessed at such time).

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

Unaudited

The following facilities were available to the Company as of ~~September~~June 30, ~~2021~~2022 and are presented net of any outstanding letters of credit:


(In millions)	(In millions)	Remaining Capacity		Availability Under Borrowing Base Limitation		(In millions)	Remaining Capacity		Availability Under Borrowing Base Limitation
Non-Vehicle Debt	Non-Vehicle Debt					Non-Vehicle Debt

First Lien RCF	First Lien RCF	$	1,144	$	1,144	First Lien RCF	$	1,449	$	1,449
Total Non-Vehicle Debt	Total Non-Vehicle Debt	1,144		1,144		Total Non-Vehicle Debt	1,449		1,449
Vehicle Debt	Vehicle Debt					Vehicle Debt
HVF III Series 2021-A	HVF III Series 2021-A	543		—		HVF III Series 2021-A	1,383		—

European ABS	European ABS	125		—		European ABS	279		—
Hertz Canadian Securitization	Hertz Canadian Securitization	69		—		Hertz Canadian Securitization	23		—
Australian Securitization	Australian Securitization	40		—		Australian Securitization	33		—
New Zealand RCF		5		—

U.K. Financing Facility	U.K. Financing Facility	24		—		U.K. Financing Facility	14		—
U.K. Toyota Financing Facility	U.K. Toyota Financing Facility	1		—		U.K. Toyota Financing Facility	3		—
Total Vehicle Debt	Total Vehicle Debt	807		—		Total Vehicle Debt	1,735		—
Total	Total	$	1,951	$	1,144	Total	$	3,184	$	1,449

Letters of Credit

On the Effective Date, in accordance with the Plan of Reorganization, drawn letters of credit under the Senior RCF, the Letter of Credit Facility and the Alternative Letter of Credit Facility were paid in full and terminated. To the extent any of the related issued letters of credit remained outstanding as of the Effective Date, certain of these letters of credit were deemed to be issued under the First Lien RCF. For the remainder, the Company provided cash collateral to backstop these obligations.

As of ~~September~~June 30, ~~2021,~~2022, there were outstanding standby letters of credit totaling ~~$366~~$701 million comprised primarily of ~~$238~~$245 million issued under the ~~Term~~term loan "C" facility (the "Term C ~~Loan~~Loan") and ~~$111~~$441 million ~~were~~ issued under the First Lien ~~RCF as discussed above.~~RCF. As of ~~September~~June 30, ~~2021, there~~2022, no capacity remains ~~$7 million of remaining capacity~~ to issue letters of credit under the Term C Loan. Such letters of credit have been issued primarily to support the Company's insurance programs ~~vehicle rental concessions~~ and ~~leaseholds as well as~~ to provide credit enhancement for ~~its~~the Company's asset-backed securitization ~~facilities.~~facilities, as well as to support the Company's vehicle rental concessions and leaseholds. As of ~~September~~June 30, ~~2021,~~2022, none of the issued letters of credit have been drawn upon.

Pledges Related to Vehicle Financing

Substantially all of the Company's revenue earning vehicles and certain related assets are owned by special purpose entities or are encumbered in favor of the lenders under the various credit facilities, other secured financings or asset-backed securities programs. None of the value of such assets (including the assets owned by Hertz Vehicle Financing III LLC and various other domestic and international subsidiaries that facilitate the Company's international securitizations) will be available to satisfy the claims of unsecured creditors unless the secured creditors are paid in full.

The Company has a 25% ownership interest in IFF No. 2, whose sole purpose is to provide commitments to lend under the European ABS in various currencies subject to borrowing bases comprised of revenue earning vehicles and related assets of certain of Hertz International, Ltd.'s subsidiaries. IFF No. 2 is a VIE and the Company is the primary beneficiary; therefore, the assets, liabilities and results of operations of IFF No. 2 are included in the accompanying unaudited condensed consolidated financial statements. As of ~~September~~June 30, ~~2021~~2022 and December 31, ~~2020,~~2021, IFF No. 2 had total assets of $838 million and $734 million, respectively, comprised primarily of intercompany receivables, and total liabilities of $837 million and $733 million, respectively, comprised primarily of debt.

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Unaudited

~~$719 million and $464 million, respectively, comprised primarily of loans receivable, and total liabilities of $719 million and $464 million, respectively, comprised primarily of debt.~~

Covenant Compliance

The First Lien RCF credit agreement (the "First Lien Credit ~~Agreement~~Agreement") requires Hertz to comply with the following financial ~~covenants: (i) until the expiration of the Relief Period, as defined in the~~covenant: a First Lien Credit Agreement, a minimum liquidity of $500 million in the first and last quarters of the calendar year and $400 million in the second and third quarters of the calendar year; and (ii) subsequent to the expiration of the Relief Period, a consolidated first lien leverage ratio (the "First Lien Ratio")Ratio of less than or equal to 3.00 to 1.00 in the first and last quarters of the calendar year and 3.50 to 1.00 in the second and third quarters of the calendar year. ~~Both of the~~This financial ~~covenants disclosed above are~~covenant was effective beginning in the third quarter of 2021. As of ~~September~~June 30, ~~2021,~~2022, Hertz was in compliance with the First Lien Ratio.

In addition to the financial ~~covenants,~~covenant, the First Lien Credit Agreement contains customary affirmative covenants including, among other things, the delivery of quarterly and annual financial statements and compliance certificates, and covenants related to conduct of business, maintenance of property and insurance, compliance with environmental laws and the granting of security interest for the benefit of the secured parties under that agreement on after-acquired real property, fixtures and future subsidiaries. The First Lien Credit Agreement also contains customary negative covenants, including, among other things, restrictions on the incurrence of liens, indebtedness, asset dispositions and restricted payments. As of ~~September~~June 30, ~~2021,~~2022, the Company was in compliance with all covenants in the First Lien Credit Agreement.

Note 7—6—Leases

The Company enters into certain agreements as a lessor under which it rents vehicles and leases fleets to customers.

The Company's operating leases for vehicle rentals have rental periods that are typically short term (e.g., daily or weekly) and can generally be extended for up to one month or terminated at the customer's discretion. Rental charges are computed on a limited or unlimited mileage rate, or on a time rate plus a mileage charge. In connection with the vehicle rental, the Company offers supplemental equipment rentals (e.g., child seats and ski racks) which are deemed lease components. The Company also offers value-added services in connection with the vehicle rental, which are deemed non-lease components, such as loss or collision damage waiver, theft protection, liability and personal accident/effects insurance coverage, premium emergency roadside service and satellite radio. Additionally, the Company charges for variable services primarily consisting of tolls and refueling charges incurred during the rental period, and for fees associated with the early or late termination of the vehicle lease. The Company mitigates residual value risk of its revenue earning vehicles by utilizing manufacturer repurchase and guaranteed depreciation programs, using sophisticated vehicle diagnostic and repair equipment to maintain the condition of its vehicles and through periodic reviews of vehicle depreciation rates based on management's ongoing assessment of present and estimated future market conditions.

Prior to the Donlen Sale on March 30, 2021, as further disclosed in Note 3, "Divestitures," the Company had operating leases for fleets as part of its Donlen business which had lease periods that were typically for twelve months, after which the lease converted to a month-to-month lease, allowing the vehicle to be surrendered any time thereafter. These leases contained terminal rental adjustment clauses which were considered variable charges.

Prior to the Effective Date, the Bankruptcy Court entered orders rejecting certain of the Company's real property leases under Section 365 of the Bankruptcy Code (the "Lease Rejection Orders"). The Lease Rejection Orders applied, in the aggregate, to 278 off airport and 34 airport locations in the Company's Americas RAC segment.

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~~HERTZ GLOBAL HOLDINGS, INC. AND SUBSIDIARIES~~

~~THE HERTZ CORPORATION AND SUBSIDIARIES~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)~~

~~Unaudited~~

The following table summarizes the amount of operating lease income and other income included in total revenues in the accompanying unaudited condensed consolidated statements of operations:


		Three Months Ended September 30,				Nine Months Ended September 30,					Three Months Ended June 30,				Six Months Ended June 30,
(In millions)	(In millions)	2021		2020		2021		2020		(In millions)	2022		2021		2022		2021
Operating lease income from vehicle rentals	Operating lease income from vehicle rentals	$	2,122	$	1,037	$	5,018	$	3,278	Operating lease income from vehicle rentals	$	2,226	$	1,798	$	3,947	$	2,896
Operating lease income from fleet leasing	Operating lease income from fleet leasing	—		155		149		485		Operating lease income from fleet leasing	—		—		—		149
Variable operating lease income	Variable operating lease income	47		—		87		34		Variable operating lease income	57		39		101		40
Revenue accounted for under Topic 842	Revenue accounted for under Topic 842	2,169		1,192		5,254		3,797		Revenue accounted for under Topic 842	2,283		1,837		4,048		3,085
Revenue accounted for under Topic 606	Revenue accounted for under Topic 606	57		76		133		226		Revenue accounted for under Topic 606	61		36		106		76
Total revenues	Total revenues	$	2,226	$	1,268	$	5,387	$	4,023	Total revenues	$	2,344	$	1,873	$	4,154	$	3,161

Note ~~8—Restructuring~~

~~Europe Restructuring~~

Due to the continued impact from COVID-19 as disclosed in Note 1, "Background," and reductions in European government support, the Company initiated a restructuring program in March 2021 in its International RAC segment. The total employees affected for the nine months ended September 30, 2021 was approximately 700 employees. The program is expected to be completed within the next twelve months.

~~U.S. Restructuring~~

Due to the impact from COVID-19 as disclosed in Note 1, "Background," the Company initiated a restructuring program, beginning in April 2020, affecting approximately 11,000 U.S. employees in its Americas Rental Car segment and corporate operations. This program was substantially completed in the third quarter of 2020.

~~Restructuring Charges~~

~~Restructuring charges under these programs were as follows:~~

Three Months Ended September 30, Nine Months Ended September 30,
(In millions) 2021 2020 2021 2020
By Type:
Termination benefits $ 7 $ — $ 19 $ 37
Lease and contract terminations — — 3 —
Facility closures — — 1 —
Total $ 7 $ — $ 23 $ 37

Three Months Ended September 30, Nine Months Ended September 30,
(In millions) 2021 2020 2021 2020
By Caption:
Direct vehicle and operating $ 2 $ — $ 10 $ 25
Selling, general and administrative 5 — 13 12
Total $ 7 $ — $ 23 $ 37

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~~HERTZ GLOBAL HOLDINGS, INC. AND SUBSIDIARIES~~

~~THE HERTZ CORPORATION AND SUBSIDIARIES~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)~~

~~Unaudited~~

Three Months Ended September 30, Nine Months Ended September 30,
(In millions) 2021 2020 2021 2020
By Segment:
Americas Rental Car segment $ — $ — $ — $ 34
International Rental Car segment 7 — 23 —
Corporate operations — — — 3
Total $ 7 $ — $ 23 $ 37

The following table summarizes the activity during the nine months ended September 30, 2021, affecting the restructuring accrual, which is recorded in accrued liabilities in the accompanying unaudited condensed consolidated balance sheets.

(In millions) Termination
Benefits Other Total
Balance as of December 31, 2020(1)
$ — $ — $ —
Reclassified from liabilities subject to compromise 7 — 7
Charges incurred 19 4 23
Cash payments (20) — (20)
Other non-cash reductions — (2) (2)
Balance as of September 30, 2021 $ 6 $ 2 $ 8

(1) As a result of filing the Chapter 11 Cases, as disclosed in Note 1, "Background," the Company classified $7 million of restructuring charges as liabilities subject to compromise in the accompanying unaudited condensed consolidated balance sheet as of December 31, 2020, which were reinstated to accrued liabilities as of June 30, 2021. See Note 17, "Liabilities Subject to Compromise."

~~Note 9—~~7—Income Tax (Provision) Benefit

Hertz Global

~~The effective tax rate is 21% and 14% for~~For the three months ended ~~September~~June 30, ~~2021 and 2020, respectively.~~2022, Hertz Global recorded a tax provision of ~~$160~~$179 million ~~and~~which resulted in an effective tax rate of 16%. For the three months ended June 30, 2021, Hertz Global recorded a tax benefit of ~~$36~~$46 million, ~~for the three months ended September 30, 2021 and 2020, respectively.~~ which resulted in an effective tax rate of 22%.

The ~~increase~~change in tax in the three months ended ~~September~~June 30, ~~2021~~2022 compared to ~~2020~~2021 is driven by improvements in Hertz ~~Global's~~Global’s financial performance, as well as the non-taxable change in fair value of the Public Warrants in 2022, non-deductible bankruptcy costs incurred in 2021 and ~~changes~~tax benefits associated with the restructuring in ~~the mix of earnings and losses for jurisdictions for which no tax benefit can be recognized.~~Europe recognized in 2021.

~~The effective tax rate is 23% and 14% for~~For the ~~nine months ended September 30, 2021 and 2020, respectively.~~first half of 2022, Hertz Global recorded a tax provision of ~~$193~~$309 million ~~and a tax benefit of $232 million for the nine months ended September 30, 2021 and 2020, respectively. The increases~~which resulted in ~~the~~an effective tax rate ~~and~~of 18%. For the first half of 2021, Hertz Global recorded a tax expense ~~for~~of $33 million, which resulted in an effective tax rate of 63%.

The change in tax in the ~~nine months ended September 30,~~first half of 2022 compared to 2021 ~~are~~is driven by improvements in Hertz ~~Global's~~Global’s financial performance, ~~changes~~as well as the non-taxable change in fair value of the ~~mix of earnings~~Public Warrants in 2022, non-deductible bankruptcy costs incurred in 2021 and ~~losses for jurisdictions for which no tax benefit can be recognized,~~ tax benefits ofassociated with the ~~European~~ restructuring ~~reduced by the non-deductible bankruptcy transaction costs, and the absence of recording valuation allowances on historical foreign deferred tax assets~~ in ~~2020.~~

~~Hertz~~

The effective tax rate is 21% and 14% for the three months ended September 30, 2021 and 2020, respectively. Hertz recorded a tax provision of $156 million and a tax benefit of $36 million for the three months ended September 30, 2021 and 2020, respectively. The increaseEurope recognized in ~~the tax provision in the three months ended September~~2021.

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

Unaudited

As of June 30, ~~2021 compared~~2022, the Company has approximately $670 million gross, or $141 million U.S. federal tax effected, of capital loss carryforward relating to ~~2020 is driven by improvements in Hertz's financial performance and changes in the mix of earnings and losses for jurisdictions~~a European restructuring for which ~~no tax benefit can be recognized.~~a full valuation allowance is recorded. The Company filed a request for a pre-filing agreement with the Internal Revenue Service ("IRS") in December 2021, to determine whether the capital loss on the European restructuring qualifies as an ordinary loss. In May of 2022, the IRS began its review of the character of the loss on the European restructuring. A favorable outcome from this proceeding could result in a full or partial release of the valuation allowance.

~~The effective tax rate is 20% and 14% for~~Hertz

For the ~~nine~~three months ended ~~September~~June 30, ~~2021 and 2020, respectively.~~2022, Hertz recorded a tax provision of ~~$189~~$178 million ~~for~~which resulted in an effective tax rate of 27%. For the ~~nine~~three months ended ~~September~~June 30, 2021, ~~compared to~~the Company recorded a tax benefit of ~~$259~~$46 million, ~~for~~which resulted in an effective tax rate of 90%.

The change in tax in the ~~nine~~three months ended ~~September~~June 30, ~~2020. The tax provision increase for the nine months ended September 30, 2021~~2022 compared to ~~2020~~2021 is driven by improvements in ~~Hertz's~~Hertz’s financial performance, as well as non-deductible bankruptcy costs incurred in 2021 and tax benefits associated with the restructuring in Europe recognized in 2021.

For the first half of 2022, Hertz recorded a tax provision of $308 million which resulted in an effective tax rate of 26%. For the first half of 2021, the Company recorded a tax provision of $33 million, which resulted in an effective tax rate of 15%.

The change in tax in the first half of 2022 compared to 2021 is driven by improvements in Hertz’s financial performance, as well as non-deductible bankruptcy costs incurred in the first half of 2021 and tax benefits associated with the restructuring in Europe recognized in the first half of 2021.

As of June 30, 2022, the Company has approximately $670 million gross, or $141 million U.S. federal tax effected, of capital loss carryforward relating to a European restructuring for which a full valuation allowance is recorded. The Company filed a request for a pre-filing agreement with the Internal Revenue Service ("IRS") in December 2021, to determine whether the capital loss on the European restructuring ~~reduced by~~qualifies as an ordinary loss. In May 2022, the ~~non-deductible bankruptcy transaction costs and~~IRS began its review of the ~~absence~~character of ~~recording~~the loss on the European restructuring. A favorable outcome from this proceeding could result in a full or partial release of the valuation ~~allowances on historical foreign deferred tax assets in 2020.~~allowance.

Note ~~10— Equity, Mezzanine~~8— Public Warrants, Equity and Earnings (Loss) Per Common Share – Hertz Global

~~Emergence from Bankruptcy~~Public Warrants

~~In connection with~~During the ~~Chapter 11 Emergence, all~~three and six months ended June 30, 2022, 44,700 and 189,890 Public Warrants were exercised, respectively, of ~~Hertz Global's existing authorized, issued,~~which 13,223 and ~~outstanding common~~46,650, respectively, were cashless exercises and ~~preferred stock~~31,477 and 143,240, respectively, were ~~cancelled.~~exercised for $13.80 per share. As of ~~the Effective Date, there~~June 30, 2022, a cumulative 6,230,170 Public Warrants have been exercised since their original issuance in June 2021. The Public Warrants are 1,000,000,000 shares of reorganized Hertz Global common stock authorized for issuance. On the Effective Date, in accordance with the Plan of Reorganization, reorganized Hertz Global issued common stock as follows:

•~~277,119,438 shares purchased by the Plan Sponsors;~~

•~~14,133,024 shares issued, pro rata, to existing shareholders;~~

•~~127,362,114 shares issued pursuant to the Rights Offering; and~~

•~~52,487,886 shares distributed to the Backstop Parties.~~

As of the Effective Date, 471,102,462 shares of reorganized Hertz Global common stock and 1,500,000 shares of reorganized Hertz Global preferred stock were issued and outstanding. The parties, including the Plan Sponsors who purchased reorganized Hertz Global common stock and preferred stock (collectively, the "Equity Commitment Parties"), the subscribers to the Rights Offering, and the Backstop Parties purchased an aggregate of (i) $4.7 billion of reorganized Hertz Global common stock and (ii) $1.5 billion (less a 2% upfront discount and stock issuance fees) of reorganized Hertz Global preferred stock as described below. The excess parrecorded at fair value ~~for the common stock shares issued by reorganized Hertz Global was recorded to additional paid-in capital~~ in the accompanying unaudited condensed consolidated balance ~~sheet~~sheets as of ~~Hertz Global.~~June 30, 2022 and December 31, 2021. See Note 11, "Fair Value Measurements."

Share Repurchase Programs for Common Stock

~~Under reorganized~~In November 2021, Hertz Global's ~~revised articles~~Board of ~~incorporation, 1,000,000,000~~Directors approved a share repurchase program (the "2021 Share Repurchase Program") that authorized the repurchase of up to $2.0 billion worth of shares of ~~reorganized~~ Hertz ~~Global~~Global's outstanding common stock. Between January 1, 2022 and June 30, 2022, a total of 80,677,021 shares of Hertz Global's common stock ~~have been authorized for issuance where each~~were repurchased at an average share ~~has a par value~~price of $0.01 and represents 1 vote on matters presented to the voting shareholders of reorganized Hertz Global. The consideration received by reorganized Hertz Global upon the issuance of common stock that exceeded the par value was recorded in additional paid-in capital in the accompanying unaudited condensed consolidated balance sheet of Hertz Global as of September 30, 2021. The reorganized Hertz Global common stock is not convertible and does not accrue dividends. Dividends, if any, are paid only upon a valid declaration by the board of directors of reorganized Hertz Global, and such declarations are subject to customary legal and regulatory restrictions, restrictions related to the Series A Preferred Stock, and applicable debt covenants.

~~Rights Offering~~

~~In accordance with the Plan of Reorganization, approximately 35% of reorganized Hertz Global common stock was offered pursuant to the Rights Offering~~$19.74 for an aggregate purchase price of $1.6 ~~billion~~billion. During the second quarter of 2022, the Company completed the 2021 Share Repurchase Program. A total of 97,783,047 shares of ~~reorganized~~ Hertz Global common stock ~~at a~~were repurchased since the inception of this program for an aggregate purchase price of ~~$10.00 per share. The Rights Offering subscription was first made available to eligible existing~~$2.0 billion. These amounts are included in treasury stock in the accompanying Hertz Global shareholders ("Eligible Existing Shareholders") on a pro rata basis to their existing common stock interest, and second, if not fully subscribed and funded by Eligible Existing Shareholders, to certain eligible holdersunaudited condensed consolidated balance sheet as of ~~the Company's Senior Notes and lenders under the Alternative Letter of Credit Facility,~~June 30, 2022.

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

Unaudited

pursuant to certain subscription procedures. The final expiration date for the Rights Offering occurred on June 15, 2021. Hertz Global closed the offering upon emergence from the Chapter 11 Cases on June 30, 2021 with Eligible Existing Shareholders subscribing to purchase 127,362,114 shares of reorganized Hertz Global common stock for gross proceeds of approximately $1.3 billion. The unsubscribed portion of the Rights Offering was backstopped by the Backstop Parties resulting in the issuance of 36,137,887 shares of reorganized Hertz Global common stock for gross proceeds of $361 million. The Backstop Parties were compensated a backstop fee of $164 million in reorganized Hertz Global common stock valued at $10.00 per share which is included in the Rights Offering totals in the accompanying unaudited condensed consolidated Statement of Changes in Mezzanine Equity and Stockholders' Equity. During the third quarter of 2021, the Company issued additional shares pursuant to the rounding provisions of the Rights Offering for cash proceeds of approximately $4 million at a purchase price of $10.00.

~~Public Warrants~~

On the Effective Date, in accordance with the Plan of Reorganization, reorganized Hertz Global issued 89,049,029 Public Warrants. During the three months ended September 30, 2021, 153,299 Public Warrants were exercised of which 86,732 were cashless exercises and 66,567 were exercised for $13.80 per share. See Note 11, "Public Warrants – Hertz Global," for attributes of the Public Warrants, which are classified as a liability for financial reporting purposes.

~~Mezzanine Equity – Preferred Stock~~

In ~~accordance with the revised articles~~June 2022, Hertz Global's Board of ~~incorporation~~Directors approved a new share repurchase program (the "2022 Share Repurchase Program") that authorized additional repurchases of ~~reorganized Hertz Global, 100,000,000~~up to an incremental $2.0 billion worth of shares of ~~preferred stock, par value $0.01 per share, have been authorized for issuance. In connection with the Plan of Reorganization, reorganized~~ Hertz Global issued 1,500,000 shares of Series A preferred stock ("Series A Preferred Stock"), with an initial stated value of $1,000 per share, to Apollo, on behalf of one or more investment funds, separate accounts, and other entities owned, controlled, managed, and/or advised by it or its affiliates, for $1.5 billion, less a 2% upfront discount and stock issuance fees. The shares have no voting rights except that the affirmative vote or consent of the holders of a majority of the shares of Series A Preferred Stock will be necessary for effecting certain actions, including any amendment of the Certificate of Incorporation or Bylaws in a manner that adversely affects the rights, preferences and privileges of the New Preferred Stock; liquidation, dissolution or winding up of the reorganized Company or its business and affairs; the creation, authorization or issuance of any class or series of capital stock other than the reorganized Hertz Global common stock; issuance of additional shares of reorganized Hertz Global preferred stock; affiliate transactions, restricted payments; mergers or other business combinations; asset sales, indebtedness and investments. The holders of the shares are protected from certain events, including the dilutive issuance of additional preferred shares and securities convertible to equity of reorganized Hertz Global.

~~At the Company's discretion, it may redeem some or all of the~~Global's outstanding shares of the Series A Preferred Stock for cash at the redemption price on the applicable redemption date (equal to the greater of (x) 100.0% of the then current accrued stated value of the shares being redeemed and (y) the amount necessary, if any, to result in a multiple on invested capital of 1.30x with respect to the shares being redeemed). As no one person or entity controls the voting stock of reorganized Hertz Global, a potential change-in-control action could be outside the Company's control and result in a non-compliance event, which could then result in a mandatory redemption of all outstanding shares of Series A Preferred Stock. Accordingly, the Series A Preferred Stock is classified as mezzanine equity and was recorded at its redemption amount upon issuance. As of September 30, 2021, the Company concluded a mandatory redemption is not probable and as such, the preferred stock is not currently redeemable or probable of becoming redeemable.

The Series A Preferred Stock shares have a liquidation preference that ranks senior to any other class or series of equity issued by reorganized Hertz Global. In the event of a voluntary or involuntary liquidation of Hertz Global, the holders of its Series A Preferred Stock would be entitled to receive a liquidation preference equal to the redemption price as of the date of such voluntary or involuntary liquidation. Pursuant to the certificate of designations for the Series A Preferred Stock, Hertz Global may redeem the Series A Preferred Stock in whole or in part at any time and

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~~HERTZ GLOBAL HOLDINGS, INC. AND SUBSIDIARIES~~

~~THE HERTZ CORPORATION AND SUBSIDIARIES~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)~~

~~Unaudited~~

from time to time, in cash, at a redemption price equal to the then-current accrued stated value of the Series A Preferred Stock being redeemed, subject to a multiple of invested capital floor price equal to 1.30 times the $1,000 per share liquidation preference. As per the terms of the First Lien Credit Agreement, the Company is precluded from making cash payments, including dividends, to the preferred shareholders prior to June 30, 2023.

Shares of the Series A Preferred Stock accrue dividends payable in cash semi-annually in arrears, at a rate of 9% per annum prior to June 30, 2023 and generally increasing thereafter. The first cash dividend payment is payable on the six-month anniversary of the Effective Date. If not paid in cash when due, the dividend accrual will increase the value of the Series A Preferred Stock as well as future dividend obligations as a result of compounding. As of September 30, 2021, the Company had $34 million of accumulated undeclared dividends for outstanding Series A Preferred Stock which are calculated on the basis of a 365 day year. Holders of the Series A Preferred Stock have certain dividend rights that provide priority over the dividend rights of holders of reorganized Hertz Global common stock. ~~The Series A Preferred Shares do not participate in any additional dividends, including any dividends that may be paid on the common stock~~In June 2022, a total of ~~reorganized Hertz Global. In general, the holders of the Series A Preferred Stock are entitled to an overall return of approximately 30% their investment.~~

~~Registration Status of Common Stock and Series A Preferred Stock~~

~~With the exception of the~~1,207,930 shares of ~~reorganized~~ Hertz Global's common stock ~~issued to the Backstop Parties, the direct investment commitment~~were repurchased under ~~the EPCA and the Rights Offering, the common stock and the Public Warrants issued by the reorganized Hertz Global pursuant to the Plan~~this program at an average share price of Reorganization were issued under an exemption from the registration requirements of the Securities Act under the Bankruptcy Code. Shares of reorganized Hertz Global common stock issued to the Backstop Parties, the direct investment commitment under the EPCA, the Rights Offering and the Series A Preferred Stock were issued under Section 4(a)(2) of the Securities Act.

~~Open Market Sale Agreement~~

In June 2020, subsequent to approval from the Bankruptcy Court and pursuant to a prospectus supplement to the Registration Statement, Hertz Global entered into an open market sale agreement under which it could offer and sell from time to time shares of its common stock, par value $0.01 per share, having$16.56 for an aggregate ~~offering~~purchase price of up to $500 million ("ATM Program"). Prior to its suspension on June 15, 2020 and ultimate termination on June 18, 2020, Hertz Global issued 13,912,368 shares under the ATM Program for net proceeds of approximately $28 million, which is$20 million. These amounts are included in ~~non-vehicle restricted cash~~treasury stock in the accompanying Hertz Global unaudited condensed consolidated balance sheet as of ~~December 31, 2020. On~~June 30, 2022.

Between July 1, 2022 and July 21, 2022, a total of 8,092,200 shares of Hertz Global's common stock were repurchased at an average share price of $17.09 for an aggregate purchase price of $138 million. A total of 9,300,130 shares of Hertz Global's common stock have been repurchased since the ~~Effective Date, in accordance with~~inception of the ~~Plan~~2022 Share Repurchase Program for an aggregate purchase price of ~~Reorganization, all shares that had been issued under the ATM Program were cancelled. Additionally, on the Effective Date,~~ $158 million.

Hertz Global ~~contributed~~funded the ~~$28 million of net proceeds to Hertz which was recorded in additional paid-in capital in the accompanying unaudited condensed consolidated balance sheet of Hertz as of September 30, 2021.~~share repurchases with available cash and dividend distributions from Hertz.

Computation of Earnings (Loss) Per Common Share

Basic earnings (loss) per common share has been computed based upon the weighted-average number of common shares outstanding. Diluted earnings (loss) per common share has been computed based upon the weighted-average number of common shares outstanding plus the effect of all potentially dilutive common stock equivalents, including Public Warrants, except when the effect would be anti-dilutive.

For the three and ~~nine~~six months ended ~~September~~June 30, ~~2021,~~2022, the diluted weighted-average shares outstanding ~~include~~included the dilutive impact of Public Warrants where the Company ~~assumes~~assumed share settlement of the Public Warrants as of the beginning of the reporting period. Additionally, the Company removes the change in fair value of Public Warrants when computing diluted earnings (loss) per common share, when the impact of Public Warrants is dilutive.

~~Due to~~The following table sets forth the ~~features and rights~~computation of the Series A Preferred Stock as described above, dividends earned by the holders of the Series A Preferred Stock, irrespective of whether paid or declared, represent earnings that are not available to the holders of Hertz Global's common stock when computing basic and diluted earnings (loss) per common share:



	Three Months Ended June 30,				Six Months Ended June 30,
(In millions, except per share data) (1)	2022		2021		2022		2021
Numerator:


Net income (loss) attributable and available to Hertz Global common stockholders, basic	$	940	$	(168)	$	1,366	$	21
Change in fair value of Public Warrants	(461)		—		(511)		—

Net income (loss) available to Hertz Global common stockholders, diluted	$	479	$	(168)	$	856	$	21
Denominator:


Basic weighted-average common shares outstanding	398		160		415		158
Dilutive effect of stock options, RSUs and PSUs	1		—		1		—
Dilutive effect of Public Warrants	25		—		27		—
Diluted weighted-average shares outstanding	424		160		443		158

Antidilutive stock options, RSUs and PSUs	7		1		6		1
Total antidilutive	7		1		6		1
Earnings (loss) per common share:
Basic	$	2.36	$	(1.05)	$	3.29	$	0.13
Diluted	$	1.13	$	(1.05)	$	1.93	$	0.13

(1) The table above is denoted in millions, excluding earnings (loss) per common share. Amounts are calculated from the underlying numbers in thousands, and as a result, may not agree to the amounts shown in the table when calculated in millions.

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

Unaudited

Note 9—Stock-Based Compensation

During the fourth quarter of 2021, Hertz Global's Board of Directors approved the Hertz Global Holdings, Inc. 2021 Omnibus Incentive Plan (the "2021 Omnibus Plan"). As of June 30, 2022, 42,470,050 shares of the Company's common stock are authorized and remain available for future grants under the 2021 Omnibus Plan. Vesting of the outstanding equity awards is also subject to accelerated vesting as set forth in the 2021 Omnibus Plan.

During the three and six months ended June 30, 2022, compensation expense of $36 million, net of $3 million tax benefit, and $63 million, net of $4 million tax benefit, respectively, was recognized for grants under the 2021 Omnibus Plan and recorded in selling, general and administrative expense in the accompanying unaudited condensed consolidated income statement. As of June 30, 2022, there was $287 million of total unrecognized compensation cost expected to be recognized over the remaining 2.2 years, on a weighted average basis, of the requisite service period that began on the grant dates.

Stock Options

A summary of stock option activity for the first half of 2022 is presented below:


Options	Shares	Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Term (years)	Aggregate Intrinsic Value (In millions)
Outstanding as of December 31, 2021	3,678,855	$	26.17	9.9	$	—
Granted	—	—		—	—
Exercised	—	—		—	—
Forfeited or Expired	(244,640)	26.17		—	—
Outstanding as of June 30, 2022	3,434,215	—		9.4	—
Exercisable as of June 30, 2022	(206,440)	26.17		9.4	—
Non-vested as of June 30, 2022	3,227,775

Performance Stock Units ("PSUs")

A summary of the PSU activity for the first half of 2022 is presented below:


	Shares	Weighted- Average Fair Value		Aggregate Intrinsic Value (In millions)
Outstanding as of December 31, 2021	—	$	—	$	—
Granted	9,928,917	17.73		—
Vested	—	—		—
Forfeited or Expired	(19,029)	22.02		—
Outstanding as of June 30, 2022	9,909,888	17.72		157

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THE HERTZ CORPORATION AND SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

Unaudited

~~The following table sets forth the computation of basic and diluted earnings (loss) per common share:~~

Three Months Ended
September 30, Nine Months Ended
September 30,
(In millions, except per share data) 2021 2020 2021 2020
Numerator:
Net income (loss) attributable to Hertz Global $ 605 $ (222) $ 626 $ (1,425)
Series A Preferred Stock(1)
(34) — (34) —
Net income (loss) available to Hertz Global common stockholders, basic 571 (222) 592 (1,425)
Change in fair value of Public Warrants (16) — (16) —
Net income (loss) available to Hertz Global common stockholders, diluted $ 555 $ (222) $ 576 $ (1,425)
Denominator:
Basic weighted-average common shares outstanding 471 156 264 148
Dilutive effect of Public Warrants 19 — 6 —
Diluted weighted-average shares outstanding 490 156 270 148
Antidilutive stock options, RSUs, PSUs and PSAs — 2 — 2
Earnings (loss) per common share:
Basic $ 1.21 $ (1.42) $ 2.25 $ (9.65)
Diluted $ 1.13 $ (1.42) $ 2.14 $ (9.65)

~~(1)Undeclared dividends on each share of Series A Preferred Stock are accumulated at a current rate of 9% per annum,~~Compensation expense for PSUs is based on the ~~basis~~grant date fair value. For grants issued in 2022, vesting eligibility is based on market, performance and service conditions of one to five years. Certain of these PSUs were valued on the grant date using a ~~365 day year.~~Monte Carlo simulation model that incorporates the assumptions noted in the following table:


	Grants
Assumption	2022
Expected volatility	68		%
Expected dividend yield	—		%
Expected term (years)	5
Risk-free interest rate	1.71		%
Weighted-average grant date fair value	$	17.61

Restricted Stock and Restricted Stock Units ("RSUs")

A summary of RSU activity for the first half of 2022 is presented below:


	Shares	Weighted- Average Fair Value		Aggregate Intrinsic Value (In millions)
Outstanding as of December 31, 2021	1,726,286	$	26.17	$	43
Granted	3,353,698	20.60		—
Vested	(568,812)	26.17		—
Forfeited or Expired	(119,604)	24.85		—
Outstanding as of June 30, 2022	4,391,568	21.95		70

Additional information pertaining to RSU activity is as follows:


	Six Months Ended June 30,
	2022
Total fair value of awards that vested (in millions)	$	15
Weighted-average grant-date fair value of awards granted	$	20.60

RSU grants issued in 2022 vest ratably over a period of two to four years. RSU grants issued in 2021 vest ratably over a period of three years.

~~Under~~Deferred Stock Units

As of June 30, 2022, there were approximately 48,000 outstanding shares of deferred stock units under the Plan of Reorganization approved by the Bankruptcy Court, the Rights Offering subscription was made available to Eligible Existing Shareholders on a pro rata basis to their existing common stock interests; therefore earnings (loss) per common share have not been retrospectively adjusted for reporting periods prior to the Effective Date.2021 Omnibus Plan.

Note ~~11—Public Warrants – Hertz Global~~

On the Effective Date, in accordance with the Plan of Reorganization and the Public Warrant Agreement, reorganized Hertz Global issued 89,049,029 Public Warrants with an initial exercise price of $13.80 per Public Warrant, subject to certain conditions. The Public Warrants allow the holders to purchase up to 18% of the aggregate number of reorganized Hertz Global common interests issued and outstanding as of the Effective Date. Each Public Warrant will entitle the holders to receive 1 share of reorganized Hertz Global common stock. The Public Warrants have a thirty-year term and are exercisable from the date of issuance until June 30, 2051, at which time any unexercised Public Warrants will expire, and the rights of the holders to purchase reorganized Hertz Global common stock will terminate. The exercise price of the Public Warrants is subject to adjustment from time to time upon any payment of cash dividends relating to reorganized Hertz Global's common stock and the occurrence of certain dilutive events as described in the Public Warrant Agreement. During the three months ended September 30, 2021, 153,299 Public Warrants were exercised of which 86,732 were cashless exercises and 66,567 were exercised for $13.80 per share.10—Financial Instruments

The ~~Public Warrants are freely transferable, subject only~~Company employs established risk management policies and procedures, and, under the terms of our ABS facilities, may be required to ~~applicable securities laws~~enter into interest rate derivatives, which seek to reduce the Company’s commercial risk exposure to fluctuations in interest rates and currency exchange rates. Although the instruments utilized involve varying degrees of credit, market and interest risk, the Company contracts with multiple counterparties to mitigate concentrations of risk and the ~~restrictions on transfers and sales of Public Warrants and reorganized Hertz Global's common stock. The Public Warrants trade on~~counterparties to the ~~over-the-counter market~~agreements are expected to perform fully under the ~~symbol HTZZW.~~

terms of the agreements. The Company ~~accounts for~~monitors counterparty credit risk, including lenders, on a regular basis, but cannot be certain that all risks will be discerned or that its risk management policies and procedures will always be effective. Additionally, upon the ~~Public Warrants in accordance with~~occurrence of an event of default under the ~~provisions of ASC 480,~~ ~~Distinguishing Liabilities from Equity~~, under which the Public Warrants meet the definition of a freestanding financial instrument. Although these are publicly traded warrants, they are classified as liabilities due to certain settlement provisions thatCompany’s International Swaps and Derivatives

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Unaudited

~~are only applicable in~~Association ("ISDA") master derivative agreements, the ~~event~~non-defaulting party generally has the right, but not the obligation, to set-off any early termination amounts under any such agreements against any other amounts owed with regard to any other agreements between the parties to each such agreement.

None of ~~change~~the Company's financial instruments have been designated as hedging instruments as of ~~control (as defined by~~June 30, 2022 and December 31, 2021.

Interest Rate Risk

The Company uses a combination of interest rate caps and swaps to manage its exposure to interest rate movements and to manage its mix of floating and fixed-rate debt.

Currency Exchange Rate Risk

The Company uses foreign currency exchange rate derivative financial instruments to manage its currency exposure resulting from intercompany transactions and other cross currency obligations.

Fair Value

The following table summarizes the ~~Public Warrant Agreement). The Public Warrants~~estimated fair value of financial instruments:


	Fair Value of Financial Instruments
	Asset Derivatives(1)				Liability Derivatives(1)
(In millions)	June 30, 2022		December 31, 2021		June 30, 2022		December 31, 2021
Interest rate instruments	$	99	$	12	$	—	$	—
Foreign currency forward contracts	2		1		6		2
Total	$	101	$	13	$	6	$	2

(1) All asset derivatives are recorded ~~at fair value~~in prepaid expenses and other assets and all liability derivatives are recorded in accrued liabilities in the accompanying unaudited condensed consolidated balance ~~sheet as of September 30, 2021. See Note 13, "Fair Value Measurements."~~sheets.

~~Note 12—Stock-Based Compensation~~

~~Under~~During the ~~Company's 2016 Omnibus Incentive Plan (the "Omnibus Plan"), the Company issued stock options, performance awards (shares~~three and units), restricted stock and restricted stock units (collectively, "Equity Awards") to key executives, employees and non-management directors. On the Effective Date, in accordance with the Plan of Reorganization, all existing common stock and outstanding Equity Awards were cancelled without any distribution, and the Omnibus Plan deemed to be cancelled. As a result of the Equity Award cancellation,six months ended June 30, 2022, the Company recognized ~~$10~~gains of $21 million ~~related to the unrecognized portion of share-based compensation~~and $65 million, respectively, on interest rate instruments which were recorded in ~~reorganization~~vehicle interest expense, net in the accompanying unaudited condensed consolidated statements of operations for the ~~nine~~three and six months ended ~~September~~June 30, 2022. The amounts recognized in income for derivative instruments were not material for the three and six months ended June 30, 2021. ~~See Note 18, "Reorganization Items, Net.~~"

~~Consistent~~The Company's foreign currency forward contracts and certain interest rate instruments are subject to enforceable master netting agreements with ~~the Disclosure Statement, the reorganized~~their counterparties. The Company ~~anticipates the approval~~does not offset such derivative assets and ~~implementation of a new management equity incentive plan (the “MEIP”). The MEIP will be effective~~liabilities in ~~a reporting period subsequent to September 30, 2021, and as such, no compensation costs related to the MEIP have been recorded in the accompanying~~its unaudited condensed consolidated ~~income statements as of September 30, 2021. As~~balance sheets, and the potential effect of the ~~filing~~Company’s use of ~~this Quarterly Report on Form 10-Q,~~ the ~~MEIP has~~master netting arrangements is not ~~been established.~~material.

Note ~~13—~~11—Fair Value Measurements

Under U.S. GAAP, entities are allowed to measure certain financial instruments and other items at fair value. The Company has not elected the fair value measurement option for any of its assets or liabilities that meet the criteria for this option. Irrespective of the fair value option previously described, U.S. GAAP requires certain financial and non-financial assets and liabilities of the Company to be measured on either a recurring basis or on a nonrecurring basis.

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

Unaudited

Fair Value Disclosures

The fair value of cash, restricted cash, accounts receivable, accounts payable and accrued liabilities, to the extent the underlying liability will be settled in cash, approximates the carrying values because of the short-term nature of these instruments.

Debt Obligations

The fair value of the debt facilities is estimated based on quoted market rates as well as borrowing rates currently available to the Company for loans with similar terms and average maturities (i.e. Level 2 inputs). For the new debt facilities entered into by the reorganized Company on the Effective Date as disclosed in Note 6, "Debt," such facilities were recently negotiated in arms-length transactions in active markets. As such, the fair value inputs are categorized as Level 1 on U.S. GAAP's fair value hierarchy.



	June 30, 2022				December 31, 2021
(In millions)	Nominal Unpaid Principal Balance		Aggregate Fair Value		Nominal Unpaid Principal Balance		Aggregate Fair Value
Non-Vehicle Debt	$	3,045	$	2,642	$	3,055	$	3,065
Vehicle Debt	10,462		9,939		7,954		7,908
Total	$	13,507	$	12,581	$	11,009	$	10,973

September 30, 2021 December 31, 2020
(In millions) Nominal Unpaid Principal Balance Aggregate Fair Value Nominal Unpaid Principal Balance Aggregate Fair Value
Non-Vehicle Debt(1)
$ 1,556 $ 1,560 $ 4,747 $ 3,382
Vehicle Debt 7,241 7,246 6,087 6,021
Total $ 8,797 $ 8,806 $ 10,834 $ 9,403

~~(1)Includes Non-Vehicle Debt included in liabilities subject to compromise in the accompanying unaudited condensed consolidated balance sheets as of December 31, 2020. See Note 6, "Debt."~~

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~~HERTZ GLOBAL HOLDINGS, INC. AND SUBSIDIARIES~~

~~THE HERTZ CORPORATION AND SUBSIDIARIES~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)~~

~~Unaudited~~

Assets and Liabilities Measured at Fair Value on a Recurring Basis

The following table summarizes the Company's cash equivalents, restricted cash equivalents and Public Warrants that are measured at fair value on a recurring basis and are categorized using the fair value hierarchy as follows:


	June 30, 2022								December 31, 2021
(In millions)	Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3		Total

Assets:
Cash equivalents and restricted cash equivalents	$	794	$	—	$	—	$	794	$	1,678	$	—	$	—	$	1,678

Liabilities:
Public Warrants	$	811	$	—	$	—	$	811	$	1,324	$	—	$	—	$	1,324

Cash Equivalents and Restricted Cash Equivalents

The Company’s cash equivalents and restricted cash equivalents primarily consist of investments in money market funds and bank money market and interest-bearing accounts. The Company determines the fair value of cash equivalents and restricted cash equivalents using a market approach based on quoted prices in active markets (i.e. Level 1 inputs).

~~The following table presents the Company's~~ ~~cash equivalents and restricted cash equivalents~~ ~~that are measured at fair value on a recurring basis and are categorized using the fair value hierarchy:~~

September 30, 2021 December 31, 2020
(In millions) Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total
Cash equivalents and restricted cash equivalents $ 1,840 $ — $ — $ 1,840 $ 723 $ — $ — $ 723

Public Warrants

~~Under the Plan of Reorganization, reorganized~~ Hertz ~~Global issued~~Global's Public Warrants ~~which~~ are classified as liabilities and recorded at fair value in the accompanying unaudited condensed consolidated balance ~~sheet~~sheets as of ~~September~~June 30, 2022 and December 31, 2021 in accordance with the provisions of ASC 480, Distinguishing Liabilities from Equity ~~("ASC 480")~~. See Note ~~11,~~8, "Public Warrants, Equity and Earnings (Loss) Per Common Share – Hertz Global," for further details. Upon issuance on the Effective Date, the initial fair value of the Public Warrants was $800 million which was computed using the Black-Scholes option pricing model using Level 2 inputs.

additional information. The ~~following table presents the key inputs used in the fair value of the Public Warrants at issuance on the Effective Date, June 30, 2021:~~



	~~Inputs~~


~~Risk-free interest rate~~	~~2.1~~		%
~~Expected term~~	~~30 years~~
~~Expected volatility~~	~~57.5~~		%
~~Exercise price~~	$	~~13.80~~
~~Asset price~~	$	~~10.02~~

~~Subsequent to the issuance of the Public Warrants, the~~ Company calculates the fair value based on the end-of-day quoted market price, a Level 1 input of the fair value hierarchy. ~~The Company's policy for recognizing transfers between fair value levels is at~~For the ~~end of the reporting period.~~

~~0As of September~~three and six months ended June 30, ~~2021,~~2022, the fair value adjustments were gains of ~~the unexercised~~$461 million and ~~outstanding Public Warrants was $783 million. The adjustment for the three and nine months ended September 30, 2021 was a gain of $16~~$511 million, respectively, and isare recorded in ~~Change~~change in fair value of Public Warrants in the accompanying unaudited condensed consolidated statements of operations for Hertz Global for the three and ~~nine~~six months ended ~~September~~June 30, ~~2021.~~2022.

~~Assets and Liabilities Measured at Fair Value on a Non-Recurring Basis~~

~~Donlen Assets~~

At December 31, 2020 as a result of the then impending Donlen Sale, the associated assets and liabilities were classified as assets held for sale and liabilities held for sale, respectively, in the accompanying unaudited

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

Unaudited

~~condensed consolidated balance sheet~~Financial Instruments

The fair value of the Company's financial instruments as of June 30, 2022 and December 31, ~~2020~~2021 are disclosed in Note 10, "Financial Instruments." The Company's financial instruments are classified as Level 2 assets and ~~were recorded at the lower of carrying value~~liabilities and are priced using quoted market prices for similar assets or ~~fair value less any costs to sell. The Company completed the Donlen Sale on March 30, 2021. See Note 3, "Divestitures," for additional information.~~liabilities in active markets.

Note ~~14—~~12—Contingencies and Off-Balance Sheet Commitments

Legal Proceedings

Self-Insured Liabilities

The Company is currently a defendant in numerous actions and has received numerous claims on which actions have not yet commenced for self-insured liabilities arising from the operation of motor vehicles rented from the Company. The obligation for self-insured liabilities on self-insured U.S. and international vehicles, as stated in the accompanying unaudited condensed consolidated balance sheets, represents an estimate for both reported accident claims not yet paid and claims incurred but not yet reported. The related liabilities are recorded on an undiscounted basis and are based on rental volume and actuarial evaluations of historical accident claim experience and trends, as well as future projections of ultimate losses, expenses, premiums and administrative costs. As of ~~September~~June 30, ~~2021~~2022 and December 31, ~~2020,~~2021, the Company's liability recorded for self-insured liabilities is $470 million and ~~$488~~$463 million, respectively. The Company believes that its analysis is based on the most relevant information available, combined with reasonable assumptions. The liability is subject to significant uncertainties. The adequacy of the liability is regularly monitored based on evolving accident claim history and insurance related ~~state~~ legislation changes. If the Company's estimates change or if actual results differ from these assumptions, the amount of the recorded liability is adjusted to reflect these results.

Loss Contingencies

From time to time the Company is a party to various legal proceedings, typically involving operational issues common to the vehicle rental ~~business, including claims by employees, former employees and governmental investigations.~~business. The Company has summarized below the ~~most significant~~material legal proceedings to which the Company was a party during the ~~nine~~three and six months ended ~~September~~June 30, ~~2021~~2022 or the period after ~~September~~June 30, ~~2021,~~2022, but before the filing of this Quarterly ~~Report on Form 10-Q.~~

~~In re Hertz Global Holdings, Inc. Securities Litigation~~ - In November 2013, a purported shareholder class action, Pedro Ramirez, Jr. v. Hertz Global Holdings, Inc., et al., was commenced in the U.S. District Court for the District of New Jersey naming Old Hertz Holdings (as defined in the Company's 2020 Form 10-K) and certain of its officers as defendants and alleging violations of the federal securities laws. The complaint alleged that Old Hertz Holdings made material misrepresentations and/or omissions of material fact in certain of its public disclosures in violation of Section 10(b) and 20(a) of the Securities Exchange Act of 1934, as amended, and Rule 10b-5 promulgated thereunder. The complaint sought an unspecified amount of monetary damages on behalf of the purported class and an award of costs and expenses, including counsel fees and expert fees. The complaint, as amended, was dismissed with prejudice on April 27, 2017 and on September 20, 2018, the Third Circuit affirmed the dismissal of the complaint with prejudice. On February 5, 2019, the plaintiffs filed a motion asking the federal district court to exercise its discretion and allow the plaintiffs to reinstate their claims to include additional allegations from the administrative order agreed to by the SEC and the Company in December 2018, which was supplemented by reference to the Company’s subsequently filed litigation against former executives (disclosed below). On September 30, 2019, the federal district court of New Jersey denied the plaintiffs’ motion for relief from the April 27, 2017 judgment and a related motion to allow the filing of a proposed fifth amended complaint. On October 30, 2019, the plaintiffs filed a notice of appeal with the U.S. Court of Appeals for the Third Circuit. The parties fully briefed the appeal and oral argument had been scheduled for June 19, 2020. As a result of the Company's bankruptcy, the appeal was stayed as to the Company, but the plaintiffs advocated that the appeal could proceed against the individual defendants. On October 13, 2020, the Third Circuit affirmed the District Court’s dismissal of the plaintiffs’ motion for relief against the individual defendants since the motion was not timely filed and the appeal as to the Company remained stayed. In February 2021, the parties

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~~Unaudited~~

participated in a bankruptcy-related mediation process and arrived at a tentative settlement wherein the Company would pay a $250,000 cash settlement. In return, the plaintiffs would voluntarily dismiss all claims in the underlying action with prejudice and withdraw the plaintiffs’ Proofs of Claim with prejudice. On March 12, 2021, the Bankruptcy Court approved the tentative settlement and the terms of the settlement have now been fully implemented. This matter is now closed.Report.

Make-Whole and Post-Petition Interest Claims - On July 1, 2021, Wells Fargo Bank, N.A., in its capacity as indenture trustee of (1) 6.250% Unsecured Notes due 2022 (the "2022 Notes"), (2) 5.500% Unsecured Notes due 2024 (the "2024 Notes"), (3) 7.125% Unsecured Notes due 2026 (the "2026 Notes"), and (4) 6.000% Unsecured Notes due 2028 (the "2028 Notes") issued by The Hertz Corporation (collectively, the “Notes”), filed a complaint (the “Complaint”) against The Hertz Corporation Dollar Rent A Car, Inc., Dollar Thrifty Automotive Group, Inc., Donlen Corporation, DTG Operations, Inc., DTG Supply, LLC, Firefly Rent A Car LLC, Hertz Car Sales LLC, Hertz Global Services Corporation, Hertz Local Edition Corp., Hertz Local Edition Transporting, Inc., Hertz System, Inc., Hertz Technologies, Inc., Hertz Transporting, Inc., Rental Car Group Company, LLC, Smartz Vehicle Rental Corporation, Thrifty Car Sales, Inc., Thrifty, LLC, Thrifty Insurance Agency, Inc., Thrifty Rent A Car System, LLC, and ~~TRAC Asia Pacific, Inc.~~multiple direct and indirect subsidiaries thereof (collectively referred to in this summary as “Defendants”). The filing of the Complaint initiated the adversary proceeding captioned Wells Fargo Bank, National Association v. The Hertz Corporation, et al. pending in the United States Bankruptcy Court for the District of Delaware, Adv. Pro. No. 21-50995 (MFW). The Complaint seeks a declaratory judgment that the holders of the Unsecured Notes are entitled to payment of certain redemption premiums and post-petition interest that they assert total $271,684,720 plus interest at the contractual default rate or, in the alternative, are entitled to payment of post-petition interest at ~~the applicable~~a contractual rate that they assert totals $124,512,653 plus ~~interest at the New York statutory rate. On July 2, 2021, Defendants were summoned to file a motion or answer to the Complaint within 30 days.~~interest. On August 2, 2021, the Defendants filed a motion to dismiss ~~both counts for declaratory judgment. Briefing~~Wells Fargo's claims. On December 22, 2021, the Bankruptcy Court dismissed Wells Fargo’s claims with respect to (i) the redemption premium allegedly owed on the ~~motion is now complete~~2022 and ~~oral argument has been scheduled~~2024 Notes and (ii) post-petition interest at the contract rate. Wells Fargo’s claims for ~~November 9, 2021.~~a redemption premium with respect to the 2026 and 2028 Senior Notes remain. Note holders that elected to participate in the rights offering held in June 2021 (the "2021 Rights Offering") waived their right to collect on the redemption premium. Therefore, since some of the 2026 and 2028 note holders elected to participate in the 2021 Rights Offering, the total amount which may be owed with respect to the asserted redemption premium for those series of notes will be reduced. On February 25, 2022, the Defendants answered the Complaint. The parties intend to submit cross-motions for summary judgment and have agreed to a schedule with respect to those motions. The Defendants ~~dispute that any such amounts are owed and~~ intend to ~~respond and otherwise vigorously defend claims set forth therein. The Company cannot predict the outcome or timing of this litigation.~~

Additionally, some creditors in the Chapter 11 Cases may assert that the Company owes additional interest and, in certain cases, additional make whole or other premiums. These claims could be material. The Company retains all rights with respect to any such asserted amounts and intends to

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

Unaudited

vigorously defend against ~~any such asserted claims. There can be no assurance regarding~~ the ~~outcome of any of the litigation regarding the validity or, if deemed valid, the amount of any such additional asserted interest and make whole~~ claims ~~and as such, the~~in this matter. The Company cannot predict the outcome or timing of this litigation.

Claims Relating to Alleged False Arrests - As a large company, we are subject to various proceedings, lawsuits, disputes, inquiries, and claims arising in the ordinary course of our business. One series of claims involves claimants seeking monetary damages from the Company in the Bankruptcy Court and Delaware Superior Court in connection with allegations that police detained or arrested them in error after the Company reported their rental cars as stolen. These claims arise from actions allegedly taken by the Company prior to emergence from its bankruptcy reorganization. The overwhelming majority of these cases involve vehicles that were not returned to the Company within a reasonable time period following their contracted return date. These claims have been the subject of press coverage and the Company has received inquiries on the matter from certain elected officials. The Company ~~maintains an internal compliance program through which it~~will continue to defend itself as appropriate and has established policies to help ensure proper treatment of its customers as well as to prosecute those involved in the theft of services or assets of the Company. The Company has made settlement offers to certain claimants, and may continue to do so from time to time ~~identifies potential violations~~in the future. We currently believe that the eventual outcome of ~~laws and regulations applicable to~~these claims will not have a materially adverse effect on the ~~Company. When~~Company’s business, financial condition, results of operations or cash flows. In addition, in May 2022, the Company ~~identifies such matters, the Company conducts an internal investigation~~filed a complaint against several of its insurers seeking a determination of its rights under its commercial general liability, and ~~otherwise cooperates with governmental authorities, as appropriate.~~directors and officers liability, insurance policies for these alleged claims in a declaratory judgment action pending in Delaware Superior Court, captioned Hertz Global Holdings, Inc. et al. v. ACE American Insurance Co. et al., C.A. No. N22C-05-130 MMJ (CCLD).

The Company has established reserves for matters where the Company believes that losses are probable and can be reasonably estimated. Other than the aggregate reserve established for claims for self-insured liabilities, none of those reserves are material. For matters where the Company has not established a reserve, the ultimate outcome or resolution cannot be predicted at this time, or the amount of ultimate loss, if any, cannot be reasonably estimated. These matters are subject to many uncertainties and the outcome of the individual litigated matters is not predictable with assurance. It is possible that certain of the actions, claims, inquiries or proceedings could be decided unfavorably to the Company or any of its subsidiaries involved. Accordingly, it is possible that an adverse outcome from such a proceeding could exceed the amount accrued in an amount that could be material to the Company's consolidated financial condition, results of operations or cash flows in any particular reporting period.

~~Other Proceedings~~Hertz Global

~~Litigation Against Former Executives~~ ~~- The Company filed litigation in~~For the ~~U.S. District Court for the District~~three months ended June 30, 2022, Hertz Global recorded a tax provision of ~~New Jersey against Mark Frissora, Elyse Douglas and John Jefferey Zimmerman on March 25, 2019, and in state court~~

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~~Unaudited~~

in Florida against Scott Sider on March 28, 2019, all of whom were former executive officers of Old Hertz Holdings. The complaints predominantly allege breach of contract and seek repayment of incentive-based compensation received by the defendants in connection with restatements included in the Old Hertz Holdings Form 10-K for the year ended December 31, 2014 and related accounting for prior periods. The Company is also seeking recovery for the costs of the SEC investigation that$179 million which resulted in an ~~administrative order on December 31, 2018 with respect to events generally involving~~effective tax rate of 16%. For the ~~restatements included in Old Hertz Holdings Form 10-K for the year~~three months ended December 31, 2014 and other damages resulting from the necessity of the restatements. The Company is pursuing these legal proceedings in accordance with its clawback policy and contractual rights. In October 2019, the Company entered into a confidential Settlement Agreement with Elyse Douglas. In September and October 2020, the judge in the New Jersey action entered orders requiring the parties and applicable insurers to attend and participate in mediation. The attorneys in the Florida action voluntarily agreed to participate in the same mediation which was held on NovemberJune 30, ~~2020. The mediation was unsuccessful, but settlement discussions continued and, on April 14,~~ 2021, the Bankruptcy Court approved a Settlement Agreement between the Company and Scott Sider. The Florida action is now closed. Fact discovery has now been completed in the New Jersey action and settlement discussions are again taking place before the case moves on to the pre-trial phase of experts’ reports and experts’ depositions. Pursuant to the agreements governing the separation of Herc Holdings from Hertz Global ~~that occurred on June 30, 2016, Herc Holdings is entitled to 15%~~recorded a tax benefit of ~~the net proceeds~~$46 million, which resulted in an effective tax rate of ~~any repayment or recovery.~~22%.

~~Indemnification Obligations~~The change in tax in the three months ended June 30, 2022 compared to 2021 is driven by improvements in Hertz Global’s financial performance, as well as the non-taxable change in fair value of the Public Warrants in 2022, non-deductible bankruptcy costs incurred in 2021 and tax benefits associated with the restructuring in Europe recognized in 2021.

In the ordinary course of business, the Company has executed contracts involving indemnification obligations customary in the relevant industry and indemnifications specific to a transaction such as the sale of a business. These indemnification obligations might include claims relating to the following: environmental matters; intellectual property rights; governmental regulations and employment-related matters; customer, supplier and other commercial contractual relationships and financial matters. Specifically, the Company has indemnified various parties for the costs associated with remediating numerous hazardous substance storage, recycling or disposal sites in many states and, in some instances, for natural resource damages. The amount of any such expenses or related natural resource damages for which the Company may be held responsible could be substantial. In addition, Hertz entered into customary indemnification agreements with Hertz Holdings and certain of the Company's stockholders and their affiliates pursuant to which Hertz Holdings and Hertz will indemnify those entities and their respective affiliates, directors, officers, partners, members, employees, agents, representatives and controlling persons, against certain liabilities arising out of performance of a consulting agreement with Hertz Holdings and each of such entities and certain other claims and liabilities, including liabilities arising out of financing arrangements or securities offerings. The Company has entered into customary indemnification agreements with each of its directors and certain of its officers. Performance under these indemnification obligations would generally be triggered by a breach of terms of the contract or by a third-party claim. In connection with the Spin-Off (as defined in the Company's 2019 Form 10-K), the Company executed an agreement with Herc Holdings that contains mutual indemnification clauses and a customary indemnification provision with respect to liability arising out of or resulting from assumed legal matters. The Company regularly evaluates the probability of having to incur costs associated with these indemnification obligations and has accrued for expected losses that are probable and estimable.

~~Note 15—Related Party Transactions~~

~~Transactions and Agreements between Hertz Holdings and Hertz~~

In June 2019, Hertz entered into a master loan agreement with Hertz Holdings for a facility size of $425 million with an expiration in June 2020 (the "2019 Master Loan"). The interest rate was based on the U.S. Dollar LIBOR rate plus a margin.

As a result of filing the Chapter 11 Cases, as disclosed in Note 1, "Background," the full amount outstanding under the 2019 Master Loan was deemed uncollectible, resulting in a charge of $133 million during the second quarter of 2020. Additionally, the loan due to an affiliate, which represents a tax-related liability from Hertz to Hertz Holdings, in the amount of $65 million was classified as liabilities subject to compromise in the accompanying unaudited condensed consolidated balance sheet of Hertz as of December 31, 2020. On the Effective Date, the $65 million

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~~Unaudited~~

tax-related liability from Hertz to Hertz Holdings was reinstated and classified as due to affiliate in the accompanying consolidated balance sheet of Hertz as of September 30, 2021. See Note 17, "Liabilities Subject to Compromise."

On May 23, 2020, Hertz entered into a new master loan agreement with Hertz Holdings for a facility size of $25 million with an expiration in May 2021 (the "New Loan"). The interest rate is based on the U.S. Dollar LIBOR rate plus a margin.

In May 2021, upon expiration of the New Loan, Hertz entered into a new master loan agreement with Hertz Holdings for a facility size of $25 million with an expiration in May 2022 (the "2021 Master Loan"), where amounts outstanding under the New Loan were transferred to the 2021 Master Loan. The interest rate is based on the U.S. Dollar LIBOR rate plus a margin. As of December 31, 2020, there was $1 million outstanding under the 2021 Master Loan representing advances and any accrued but unpaid interest. On June 30, 2021, in connection with the Chapter 11 Emergence, the ATM Program contribution from Hertz Global, as discussed in Note 10, Equity, Mezzanine Equity and Earnings (Loss) Per Share – Hertz Global, was used to settle amounts outstanding under the New Loan. As of September 30, 2021, there is no outstanding balance under the 2021 Master Loan.

~~767 Auto Leasing LLC~~

In January 2018, Hertz entered into a Master Motor Vehicle Lease and Management Agreement (the “767 Lease Agreement”) pursuant to which Hertz granted 767 Auto Leasing LLC (“767”), an entity affiliated with the Icahn Group, a related party duringFor the first half of ~~2020 until all owned shares of~~2022, Hertz Global ~~common stock were divested~~recorded a tax provision of $309 million which resulted in ~~May 2020,~~an effective tax rate of 18%. For the ~~option to acquire certain vehicles from~~first half of 2021, Hertz ~~at rates aligned with the rates at~~Global recorded a tax expense of $33 million, which Hertz sells vehicles to third parties. Hertz leases the vehicles purchased by 767 under the 767 Lease Agreement or from third parties, under a mutually developed fleet plan and Hertz manages, services, repairs, sells and maintains those leased vehicles on behalfresulted in an effective tax rate of 767. Hertz currently rents the leased vehicles to drivers of transportation network companies ("TNC") from rental counters within locations leased or owned by affiliates of 767, including locations operated under a master lease agreement with The Pep Boys – Manny, Joe & Jack. The 767 Lease Agreement had an initial term, as extended, of approximately 22 months, and is subject to automatic six month renewals thereafter, unless terminated by either party (with or without cause) prior to the start of any such six month renewal.

767’s payment obligations under the 767 Lease Agreement are guaranteed by American Entertainment Properties Corp. ("AEPC"), an entity affiliated with Carl C. Icahn and his affiliates. During the three and nine ended September 30, 2021, 767 distributed $10 million and $25 million, respectively, to AEPC along with the return of certain vehicles, and there were no cash contributions from AEPC to 767. During the three and nine months ended September 30, 2020, 767 distributed $55 million to AEPC, and there were no cash contributions from AEPC to 767, except for certain services. The parties have agreed that the 767 Lease Agreement will terminate effective October 31, 2021, and that, in connection with the wind-down, Hertz will purchase certain of the 767 leased vehicles for continued rental as part of Hertz’s TNC rental fleet.63%.

The ~~Company is entitled to 25% of the profit from the rental of the leased vehicles, as specified~~change in tax in the ~~767 Lease Agreement, which~~first half of 2022 compared to 2021 is variable and based primarily on the rental revenue, less certain vehicle-related costs, such as depreciation, licensing and maintenance expenses. The Company has determined that it is the primary beneficiary of 767 due to its power to direct the activities of 767 that most significantly impact 767's economicdriven by improvements in Hertz Global’s financial performance, ~~and the Company's obligation to absorb 25% of 767's gains/losses. Accordingly, 767 is consolidated by the Company as a VIE.~~

~~Note 16—Segment Information~~

The Company’s CODM assesses performance and allocates resources based upon the financial information for the Company’s operating segments. The Company aggregates certain of its operating segments into its reportable segments. In the second quarter of 2021, in connection with the Chapter 11 Emergence as disclosed in Note 1, "Background," and changes in how the Company's CODM regularly reviews operating results and allocates resources, the Company revised its reportable segments to include Canada, Latin America and the Caribbean in its Americas Rental Car ("Americas RAC") reportable segment, which were previously included in its International

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~~Unaudited~~

Rental Car ("International RAC") reportable segment. Accordingly, prior periods have been restated to conform with the revised presentation. The Company has identified 2 reportable segments, which are organized based on the products and services provided by its operating segments and the geographic areas in which its operating segments conduct business, as follows.

•~~Americas RAC – rental of vehicles (cars, crossovers, vans and light trucks),~~ as well as ~~sales of value-added services,~~the non-taxable change in ~~the U.S., Canada, Latin America and the Caribbean;~~

•~~International RAC – rental and leasing of vehicles (cars, vans, crossovers and light trucks), as well as sales of value-added services, internationally and consists primarily~~fair value of the ~~Company's~~Public Warrants in 2022, non-deductible bankruptcy costs incurred in 2021 and tax benefits associated with the restructuring in Europe operating segment and other international operating segments, which are aggregated into a reportable segment based primarily upon similar economic characteristics, products and services, customers, delivery methods and general regulatory environments; and

In addition to the above reportable segments, the Company has corporate operations ("Corporate") which includes general corporate assets and expenses and certain interest expense (including net interest on non-vehicle debt). Corporate includes other items necessary to reconcile the reportable segments to the Company's total amounts.

The following tables provide significant statements of operations and balance sheet information by reportable segment for each of Hertz Global and Hertz, as well as Adjusted EBITDA, the measure used to determine segment profitability.

Three Months Ended September 30, Nine Months Ended September 30,
(In millions) 2021 2020 2021 2020
Revenues
Americas RAC $ 1,914 $ 892 $ 4,524 $ 2,857
International RAC 312 227 727 678
Total reportable segments 2,226 1,119 5,251 3,535
All other operations(1)
— 149 136 488
Total Hertz Global and Hertz $ 2,226 $ 1,268 $ 5,387 $ 4,023
Depreciation of revenue earning vehicles and lease charges
Americas RAC $ 24 $ 188 $ 314 $ 1,080
International RAC 37 53 106 200
Total reportable segments 61 241 420 1,280
All other operations(1)(2)
— 106 — 352
Total Hertz Global and Hertz $ 61 $ 347 $ 420 $ 1,632
Adjusted EBITDA
Americas RAC $ 830 $ (11) $ 1,520 $ (701)
International RAC 78 (34) 69 (184)
Total reportable segments 908 (45) 1,589 (885)
All other operations(1)
— 24 13 71
Corporate (48) (5) (100) (41)
Total Hertz Global and Hertz $ 860 $ (26) $ 1,502 $ (855)

~~(1) Substantially comprised of the Company's Donlen business, which was sold on March 30, 2021 as disclosed~~recognized in ~~Note 3, "Divestitures."~~

(2) The decrease in depreciation of revenue earning vehicles and lease charges during the nine months ended September 30, 2021, is due in part to the suspension of depreciation for the Donlen business while classified as held for sale, prior to closing on March 30, 2021, as disclosed in Note 3, "Divestitures."2021.

4222

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

Unaudited

(In millions) September 30, 2021 December 31, 2020
Total assets
Americas RAC $ 13,273 $ 11,337
International RAC 3,134 2,661
Total reportable segments 16,407 13,998
All other operations(1)
— 1,818
Corporate 3,186 1,092
Total Hertz Global(2)
19,593 16,908
Corporate - Hertz(3)
— (28)
Total Hertz(2)
$ 19,593 $ 16,880
As of June 30, 2022, the Company has approximately $670 million gross, or $141 million U.S. federal tax effected, of capital loss carryforward relating to a European restructuring for which a full valuation allowance is recorded. The Company filed a request for a pre-filing agreement with the Internal Revenue Service ("IRS") in December 2021, to determine whether the capital loss on the European restructuring qualifies as an ordinary loss. In May of 2022, the IRS began its review of the character of the loss on the European restructuring. A favorable outcome from this proceeding could result in a full or partial release of the valuation allowance.

~~(1) Substantially comprised~~Hertz

For the three months ended June 30, 2022, Hertz recorded a tax provision of $178 million which resulted in an effective tax rate of 27%. For the three months ended June 30, 2021, the Company recorded a tax benefit of $46 million, which resulted in an effective tax rate of 90%.

The change in tax in the three months ended June 30, 2022 compared to 2021 is driven by improvements in Hertz’s financial performance, as well as non-deductible bankruptcy costs incurred in 2021 and tax benefits associated with the restructuring in Europe recognized in 2021.

As of June 30, 2022, the Company has approximately $670 million gross, or $141 million U.S. federal tax effected, of capital loss carryforward relating to a European restructuring for which a full valuation allowance is recorded. The Company filed a request for a pre-filing agreement with the Internal Revenue Service ("IRS") in December 2021, to determine whether the capital loss on the European restructuring qualifies as an ordinary loss. In May 2022, the IRS began its review of the Company's Donlen business, which was sold on March 30, 2021 as disclosed in Note 3, "Divestitures." At December 31, 2020, includes $1.8 billion of Donlen's assets which were classified as held for sale in the accompanying unaudited condensed consolidated balance sheet.

(2) The consolidated total assets of Hertz Global and Hertz as of September 30, 2021 and December 31, 2020 include total assets of VIEs of $745 million and $511 million, respectively, which can only be used to settle obligationscharacter of the ~~VIEs. See "Pledges Related to Vehicle Financing"~~loss on the European restructuring. A favorable outcome from this proceeding could result in a full or partial release of the valuation allowance.

Note ~~6, "Debt,"~~8— Public Warrants, Equity and ~~"767 Auto Leasing LLC" in Note 15, "Related Party Transactions," for further information.~~

~~(3) Excludes net proceeds of $28 million from an open market sale of~~Earnings (Loss) Per Common Share – Hertz Global ~~common stock completed~~

Public Warrants

During the three and six months ended June 30, 2022, 44,700 and 189,890 Public Warrants were exercised, respectively, of which 13,223 and 46,650, respectively, were cashless exercises and 31,477 and 143,240, respectively, were exercised for $13.80 per share. As of June 30, 2022, a cumulative 6,230,170 Public Warrants have been exercised since their original issuance in June ~~2020, which is included in non-vehicle restricted cash~~2021. The Public Warrants are recorded at fair value in the accompanying unaudited condensed consolidated balance sheets atas of June 30, 2022 and December 31, ~~2020.~~2021. See Note 11, "Fair Value Measurements."

Share Repurchase Programs for Common Stock

In November 2021, Hertz Global's Board of Directors approved a share repurchase program (the "2021 Share Repurchase Program") that authorized the repurchase of up to $2.0 billion worth of shares of Hertz Global's outstanding common stock. Between January 1, 2022 and June 30, 2022, a total of 80,677,021 shares of Hertz Global's common stock were repurchased at an average share price of $19.74 for an aggregate purchase price of $1.6 billion. During the second quarter of 2022, the Company completed the 2021 Share Repurchase Program. A total of 97,783,047 shares of Hertz Global common stock were repurchased since the inception of this program for an aggregate purchase price of $2.0 billion. These amounts are included in treasury stock in the accompanying Hertz Global unaudited condensed consolidated balance sheet as of June 30, 2022.

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

Unaudited

~~Reconciliations~~

In June 2022, Hertz Global's Board of ~~Adjusted EBITDA by reportable segment~~Directors approved a new share repurchase program (the "2022 Share Repurchase Program") that authorized additional repurchases of up to ~~consolidated~~an incremental $2.0 billion worth of shares of Hertz Global's outstanding common stock. In June 2022, a total of 1,207,930 shares of Hertz Global's common stock were repurchased under this program at an average share price of $16.56 for an aggregate purchase price of $20 million. These amounts are ~~summarized below:~~included in treasury stock in the accompanying Hertz Global unaudited condensed consolidated balance sheet as of June 30, 2022.

Hertz Global funded the share repurchases with available cash and dividend distributions from Hertz.

Computation of Earnings (Loss) Per Common Share

For the three and six months ended June 30, 2022, the diluted weighted-average shares outstanding included the dilutive impact of Public Warrants where the Company assumed share settlement of the Public Warrants as of the beginning of the reporting period. Additionally, the Company removes the change in fair value of Public Warrants when computing diluted earnings (loss) per common share, when the impact of Public Warrants is dilutive.

The following table sets forth the computation of basic and diluted earnings (loss) per common share:



	Three Months Ended June 30,				Six Months Ended June 30,
(In millions, except per share data) (1)	2022		2021		2022		2021
Numerator:


Net income (loss) attributable and available to Hertz Global common stockholders, basic	$	940	$	(168)	$	1,366	$	21
Change in fair value of Public Warrants	(461)		—		(511)		—

Net income (loss) available to Hertz Global common stockholders, diluted	$	479	$	(168)	$	856	$	21
Denominator:


Basic weighted-average common shares outstanding	398		160		415		158
Dilutive effect of stock options, RSUs and PSUs	1		—		1		—
Dilutive effect of Public Warrants	25		—		27		—
Diluted weighted-average shares outstanding	424		160		443		158

Antidilutive stock options, RSUs and PSUs	7		1		6		1
Total antidilutive	7		1		6		1
Earnings (loss) per common share:
Basic	$	2.36	$	(1.05)	$	3.29	$	0.13
Diluted	$	1.13	$	(1.05)	$	1.93	$	0.13

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

Unaudited

Note 9—Stock-Based Compensation

Stock Options

A summary of stock option activity for the first half of 2022 is presented below:


Options	Shares	Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Term (years)	Aggregate Intrinsic Value (In millions)
Outstanding as of December 31, 2021	3,678,855	$	26.17	9.9	$	—
Granted	—	—		—	—
Exercised	—	—		—	—
Forfeited or Expired	(244,640)	26.17		—	—
Outstanding as of June 30, 2022	3,434,215	—		9.4	—
Exercisable as of June 30, 2022	(206,440)	26.17		9.4	—
Non-vested as of June 30, 2022	3,227,775

Performance Stock Units ("PSUs")

A summary of the PSU activity for the first half of 2022 is presented below:


	Shares	Weighted- Average Fair Value		Aggregate Intrinsic Value (In millions)
Outstanding as of December 31, 2021	—	$	—	$	—
Granted	9,928,917	17.73		—
Vested	—	—		—
Forfeited or Expired	(19,029)	22.02		—
Outstanding as of June 30, 2022	9,909,888	17.72		157

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Unaudited

Compensation expense for PSUs is based on the grant date fair value. For grants issued in 2022, vesting eligibility is based on market, performance and service conditions of one to five years. Certain of these PSUs were valued on the grant date using a Monte Carlo simulation model that incorporates the assumptions noted in the following table:


	Grants
Assumption	2022
Expected volatility	68		%
Expected dividend yield	—		%
Expected term (years)	5
Risk-free interest rate	1.71		%
Weighted-average grant date fair value	$	17.61

Restricted Stock and Restricted Stock Units ("RSUs")

A summary of RSU activity for the first half of 2022 is presented below:


	Shares	Weighted- Average Fair Value		Aggregate Intrinsic Value (In millions)
Outstanding as of December 31, 2021	1,726,286	$	26.17	$	43
Granted	3,353,698	20.60		—
Vested	(568,812)	26.17		—
Forfeited or Expired	(119,604)	24.85		—
Outstanding as of June 30, 2022	4,391,568	21.95		70

Additional information pertaining to RSU activity is as follows:


	Six Months Ended June 30,
	2022
Total fair value of awards that vested (in millions)	$	15
Weighted-average grant-date fair value of awards granted	$	20.60

RSU grants issued in 2022 vest ratably over a period of two to four years. RSU grants issued in 2021 vest ratably over a period of three years.

Deferred Stock Units

As of June 30, 2022, there were approximately 48,000 outstanding shares of deferred stock units under the 2021 Omnibus Plan.

Note 10—Financial Instruments

The Company employs established risk management policies and procedures, and, under the terms of our ABS facilities, may be required to enter into interest rate derivatives, which seek to reduce the Company’s commercial risk exposure to fluctuations in interest rates and currency exchange rates. Although the instruments utilized involve varying degrees of credit, market and interest risk, the Company contracts with multiple counterparties to mitigate concentrations of risk and the counterparties to the agreements are expected to perform fully under the terms of the agreements. The Company monitors counterparty credit risk, including lenders, on a regular basis, but cannot be certain that all risks will be discerned or that its risk management policies and procedures will always be effective. Additionally, upon the occurrence of an event of default under the Company’s International Swaps and Derivatives

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Unaudited

Association ("ISDA") master derivative agreements, the non-defaulting party generally has the right, but not the obligation, to set-off any early termination amounts under any such agreements against any other amounts owed with regard to any other agreements between the parties to each such agreement.

None of the Company's financial instruments have been designated as hedging instruments as of June 30, 2022 and December 31, 2021.

Interest Rate Risk

The Company uses a combination of interest rate caps and swaps to manage its exposure to interest rate movements and to manage its mix of floating and fixed-rate debt.

Currency Exchange Rate Risk

The Company uses foreign currency exchange rate derivative financial instruments to manage its currency exposure resulting from intercompany transactions and other cross currency obligations.

Fair Value

The following table summarizes the estimated fair value of financial instruments:


	Fair Value of Financial Instruments
	Asset Derivatives(1)				Liability Derivatives(1)
(In millions)	June 30, 2022		December 31, 2021		June 30, 2022		December 31, 2021
Interest rate instruments	$	99	$	12	$	—	$	—
Foreign currency forward contracts	2		1		6		2
Total	$	101	$	13	$	6	$	2

(1) All asset derivatives are recorded in prepaid expenses and other assets and all liability derivatives are recorded in accrued liabilities in the accompanying unaudited condensed consolidated balance sheets.

During the three and six months ended June 30, 2022, the Company recognized gains of $21 million and $65 million, respectively, on interest rate instruments which were recorded in vehicle interest expense, net in the accompanying unaudited condensed consolidated statements of operations for the three and six months ended June 30, 2022. The amounts recognized in income for derivative instruments were not material for the three and six months ended June 30, 2021.

The Company's foreign currency forward contracts and certain interest rate instruments are subject to enforceable master netting agreements with their counterparties. The Company does not offset such derivative assets and liabilities in its unaudited condensed consolidated balance sheets, and the potential effect of the Company’s use of the master netting arrangements is not material.

Note 11—Fair Value Measurements

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

Unaudited

Fair Value Disclosures

Debt Obligations



	June 30, 2022				December 31, 2021
(In millions)	Nominal Unpaid Principal Balance		Aggregate Fair Value		Nominal Unpaid Principal Balance		Aggregate Fair Value
Non-Vehicle Debt	$	3,045	$	2,642	$	3,055	$	3,065
Vehicle Debt	10,462		9,939		7,954		7,908
Total	$	13,507	$	12,581	$	11,009	$	10,973

Assets and Liabilities Measured at Fair Value on a Recurring Basis


	June 30, 2022								December 31, 2021
(In millions)	Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3		Total

Assets:
Cash equivalents and restricted cash equivalents	$	794	$	—	$	—	$	794	$	1,678	$	—	$	—	$	1,678

Liabilities:
Public Warrants	$	811	$	—	$	—	$	811	$	1,324	$	—	$	—	$	1,324

Cash Equivalents and Restricted Cash Equivalents

Public Warrants

Hertz Global's Public Warrants are classified as liabilities and recorded at fair value in the accompanying unaudited condensed consolidated balance sheets as of June 30, 2022 and December 31, 2021 in accordance with the provisions of ASC 480, Distinguishing Liabilities from Equity. See Note 8, "Public Warrants, Equity and Earnings (Loss) Per Common Share – Hertz Global," for additional information. The Company calculates the fair value based on the end-of-day quoted market price, a Level 1 input of the fair value hierarchy. For the three and six months ended June 30, 2022, the fair value adjustments were gains of $461 million and $511 million, respectively, and are recorded in change in fair value of Public Warrants in the accompanying unaudited condensed consolidated statements of operations for Hertz Global for the three and six months ended June 30, 2022.

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

Unaudited

Financial Instruments

The fair value of the Company's financial instruments as of June 30, 2022 and December 31, 2021 are disclosed in Note 10, "Financial Instruments." The Company's financial instruments are classified as Level 2 assets and liabilities and are priced using quoted market prices for similar assets or liabilities in active markets.

Note 12—Contingencies and Off-Balance Sheet Commitments

Legal Proceedings

Self-Insured Liabilities

The Company is currently a defendant in numerous actions and has received numerous claims on which actions have not yet commenced for self-insured liabilities arising from the operation of motor vehicles rented from the Company. The obligation for self-insured liabilities on self-insured U.S. and international vehicles, as stated in the accompanying unaudited condensed consolidated balance sheets, represents an estimate for both reported accident claims not yet paid and claims incurred but not yet reported. The related liabilities are recorded on an undiscounted basis and are based on rental volume and actuarial evaluations of historical accident claim experience and trends, as well as future projections of ultimate losses, expenses, premiums and administrative costs. As of June 30, 2022 and December 31, 2021, the Company's liability recorded for self-insured liabilities is $470 million and $463 million, respectively. The Company believes that its analysis is based on the most relevant information available, combined with reasonable assumptions. The liability is subject to significant uncertainties. The adequacy of the liability is regularly monitored based on evolving accident claim history and insurance related legislation changes. If the Company's estimates change or if actual results differ from these assumptions, the amount of the recorded liability is adjusted to reflect these results.

Loss Contingencies

From time to time the Company is a party to various legal proceedings, typically involving operational issues common to the vehicle rental business. The Company has summarized below the material legal proceedings to which the Company was a party during the three and six months ended June 30, 2022 or the period after June 30, 2022, but before the filing of this Quarterly Report.

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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)

Unaudited

vigorously defend against the claims in this matter. The Company cannot predict the outcome or timing of this litigation.

Claims Relating to Alleged False Arrests - As a large company, we are subject to various proceedings, lawsuits, disputes, inquiries, and claims arising in the ordinary course of our business. One series of claims involves claimants seeking monetary damages from the Company in the Bankruptcy Court and Delaware Superior Court in connection with allegations that police detained or arrested them in error after the Company reported their rental cars as stolen. These claims arise from actions allegedly taken by the Company prior to emergence from its bankruptcy reorganization. The overwhelming majority of these cases involve vehicles that were not returned to the Company within a reasonable time period following their contracted return date. These claims have been the subject of press coverage and the Company has received inquiries on the matter from certain elected officials. The Company will continue to defend itself as appropriate and has established policies to help ensure proper treatment of its customers as well as to prosecute those involved in the theft of services or assets of the Company. The Company has made settlement offers to certain claimants, and may continue to do so from time to time in the future. We currently believe that the eventual outcome of these claims will not have a materially adverse effect on the Company’s business, financial condition, results of operations or cash flows. In addition, in May 2022, the Company filed a complaint against several of its insurers seeking a determination of its rights under its commercial general liability, and directors and officers liability, insurance policies for these alleged claims in a declaratory judgment action pending in Delaware Superior Court, captioned Hertz Global Holdings, Inc. et al. v. ACE American Insurance Co. et al., C.A. No. N22C-05-130 MMJ (CCLD).

~~Hertz Global~~

Three Months Ended
September 30, Nine Months Ended
September 30,
(In millions) 2021 2020 2021 2020
Adjusted EBITDA:
Americas RAC $ 830 $ (11) $ 1,520 $ (701)
International RAC 78 (34) 69 (184)
Total reportable segments 908 (45) 1,589 (885)
All other operations(1)
— 24 13 71
Corporate(2)
(48) (5) (100) (41)
Total Hertz Global 860 (26) 1,502 (855)
Adjustments:
Non-vehicle depreciation and amortization (49) (58) (153) (168)
Non-vehicle debt interest, net(3)
(22) (17) (157) (118)
Vehicle debt-related charges(4)
(8) (13) (62) (37)
Restructuring and restructuring related charges(5)
(22) (7) (72) (54)
Technology-related intangible and other asset impairments(6)
— — — (193)
Information technology and finance transformation costs(7)
(3) (8) (13) (34)
Reorganization items, net(8)
— (78) (677) (101)
Pre-reorganization charges and non-debtor financing charges(9)
(1) (44) (41) (89)
Gain from the Donlen Sale(10)
— — 400 —
Change in fair value of Public Warrants(11)
16 — 16 —
Other items(12)
(3) (8) 77 (15)
Income (loss) before income taxes $ 768 $ (259) $ 820 $ (1,664)

~~Table of Contents~~

~~HERTZ GLOBAL HOLDINGS, INC. AND SUBSIDIARIES~~

~~THE HERTZ CORPORATION AND SUBSIDIARIES~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)~~

~~Unaudited~~

~~Hertz~~

Three Months Ended
September 30, Nine Months Ended
September 30,
(In millions) 2021 2020 2021 2020
Adjusted EBITDA:
Americas RAC $ 830 $ (11) $ 1,520 $ (701)
International RAC 78 (34) 69 (184)
Total reportable segments 908 (45) 1,589 (885)
All other operations(1)
— 24 13 72
Corporate(2)
(48) (5) (100) (42)
Total Hertz 860 (26) 1,502 (855)
Adjustments:
Non-vehicle depreciation and amortization (49) (58) (153) (168)
Non-vehicle debt interest, net(3)
(22) (17) (157) (116)
Vehicle debt-related charges(4)
(8) (13) (62) (37)
Restructuring and restructuring related charges(5)
(22) (7) (72) (54)
Technology-related intangible and other asset impairments(6)
— — — (193)
Write-off of intercompany loan(13)
— — — (133)
Information technology and finance transformation costs(7)
(3) (8) (13) (34)
Reorganization items, net(8)
— (78) (513) (101)
Pre-reorganization charges and non-debtor financing charges(9)
(1) (44) (41) (89)
Gain from the Donlen Sale(10)
— — 400 —
Other items(12)
(3) (8) 77 (15)
Income (loss) before income taxes $ 752 $ (259) $ 968 $ (1,795)

~~(1)Substantially comprised of the Company's Donlen business, which was sold on March 30, 2021 as disclosed in Note 3, "Divestitures."~~

~~(2)Represents other reconciling items primarily consisting of general corporate expenses, non-vehicle interest expense, as well as other business activities.~~

~~(3)~~In 2021 includes $8 million of loss on extinguishment of debt associated with the payoff and termination of the HIL Credit Agreement recorded in the second quarter. See Note 6, "Debt," for further information.

~~(4)Represents vehicle debt-related charges relating to the amortization of deferred financing costs and debt discounts and premiums.~~

~~(5)~~Represents charges incurred under restructuring actions as defined in U.S. GAAP. See Note 8, "Restructuring," for further information. Also includes restructuring related charges such as incremental costs incurred directly supporting business transformation initiatives.

~~(6)Represents the impairment of technology-related intangible assets and capitalized cloud computing implementation costs, as disclosed in Note 5, "Goodwill and Intangible Assets, Net."~~

~~(7)~~Represents costs associated with the Company’s information technology and finance transformation programs, both of which are multi-year initiatives to upgrade and modernize the Company’s systems and processes.

~~(8)Represents charges incurred associated with the filing of and the emergence from the Chapter 11 Cases, as disclosed in Note 18, "Reorganization Items, Net."~~

~~(9)~~Represents charges incurred prior to the filing of the Chapter 11 Cases, as disclosed in Note 1, "Background," which are comprised of preparation charges for the reorganization, such as professional fees. Also, includes certain non-debtor financing and professional fee charges.

~~(10)Represents the net gain from the sale of the Company's Donlen business on March 30, 2021 as disclosed in Note 3, "Divestitures."~~

~~(11)Represents the change in fair value during the reporting period for the Company's outstanding Public Warrants.~~

~~(12)~~Represents miscellaneous items, including non-cash stock-based compensation charges, and amounts attributable to noncontrolling interests. For 2021, also includes $100 million associated with the suspension of depreciation during the first quarter for the Donlen business while classified as held for sale, partially offset by letter of credit fees recorded in the first half of 2021 and charges for a multiemployer pension plan withdrawal liability recorded in the first quarter. For 2020, also includes charges of $18 million for losses associated with certain vehicle damages, which were recorded in the second quarter, partially offset by a $20 million gain on the sale of non-vehicle capital assets, which was recorded in the first quarter.

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~~HERTZ GLOBAL HOLDINGS, INC. AND SUBSIDIARIES~~

~~THE HERTZ CORPORATION AND SUBSIDIARIES~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)~~

~~Unaudited~~

~~(13)Represents the write-off of the 2019 Master Loan between Hertz and Hertz Holdings, as disclosed in Note 13, "Related Party Transactions."~~

~~Note 17—Liabilities Subject to Compromise~~

As a result of the Chapter 11 Emergence and implementation of the Plan of Reorganization, the Company reinstated certain liabilities that had been classified as liabilities subject to compromise in the accompanying unaudited condensed consolidated balance sheet as of December 31, 2020. The following table represents the reinstatement of liabilities subject to compromise, which include pre-petition liabilities that were allowed to be or that were estimated to be allowed as claims in the Chapter 11 Cases.

~~(In millions)~~

~~June 30, 2021~~

~~Reinstated on the Effective Date:~~

~~Accounts payable~~

~~257~~

~~Accrued liabilities~~

~~Accrued taxes, net~~

~~Liabilities reinstated - Hertz Global~~

~~370~~

~~Stockholder's equity - Due to affiliate - Hertz~~

~~Liabilities reinstated - Hertz~~

~~435~~

The accompanying unaudited condensed consolidated balance sheet as of December 31, 2020 includes amounts classified as liabilities subject to compromise, which represented pre-petition liabilities the Company anticipated would be allowed as claims in the Chapter 11 Cases. These amounts represented the Debtors' current estimate of known or potential obligations to be resolved in connection with the Chapter 11 Cases.

~~The following table summarizes liabilities subject to compromise as of December 31, 2020.~~



~~(In millions)~~	~~December 31, 2020~~
~~Accounts payable~~	$	~~267~~
~~Accrued liabilities(1)~~	~~166~~
~~Accrued taxes, net~~	19
~~Accrued interest on debt subject to compromise~~	70

~~Debt subject to compromise(2)~~	~~4,443~~


~~Liabilities subject to compromise - Hertz Global~~	~~4,965~~
~~Due from affiliate - Hertz(3)~~	65
~~Liabilities subject to compromise - Hertz~~	$	~~5,030~~

~~(1) Includes $24 million of U.S. pension benefit obligation reported as liabilities subject to compromise as of December 31, 2020.~~

~~(2) See Note 6, "Debt," for details of pre-petition, non-vehicle debt reported as liabilities subject to compromise as of December 31, 2020.~~

~~(3) See Note 15, "Related Party Transactions," for details of a pre-petition intercompany loan due to an affiliate reported as liabilities subject to compromise as of December 31, 2020.~~

~~Note 18—Reorganization Items, Net~~

The Debtors have incurred incremental costs as a result of the Chapter 11 Cases and settlement of liabilities under the Plan of Reorganization which have been recorded as reorganization items, net in the accompanying unaudited condensed consolidated statement of operations for the nine months ended September 30, 2021 and the three and nine months ended September 30, 2020.

~~Table of Contents~~

~~HERTZ GLOBAL HOLDINGS, INC. AND SUBSIDIARIES~~

~~THE HERTZ CORPORATION AND SUBSIDIARIES~~

~~NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)~~

~~Unaudited~~

~~The following tables summarize reorganization items, net:~~

Hertz Global

Three Months Ended
September 30, Nine Months Ended
September 30,
(In millions) 2021 2020 2021 2020
Professional fees and other bankruptcy related costs $ — $ 78 $ 257 $ 101
Loss on extinguishment of debt(1)
— — 191 —
Backstop fee — — 164 —
Breakup fee(2)
— — 77 —
Contract settlements — — 25 —
Cancellation of share-based compensation grants(3)
— — (10) —
Net gain on settlement of liabilities subject to compromise — — (22) —
Other, net — — (5) —
Reorganization items, net $ — $ 78 $ 677 $ 101
For the three months ended June 30, 2022, Hertz Global recorded a tax provision of $179 million which resulted in an effective tax rate of 16%. For the three months ended June 30, 2021, Hertz Global recorded a tax benefit of $46 million, which resulted in an effective tax rate of 22%.

The change in tax in the three months ended June 30, 2022 compared to 2021 is driven by improvements in Hertz Global’s financial performance, as well as the non-taxable change in fair value of the Public Warrants in 2022, non-deductible bankruptcy costs incurred in 2021 and tax benefits associated with the restructuring in Europe recognized in 2021.

For the first half of 2022, Hertz Global recorded a tax provision of $309 million which resulted in an effective tax rate of 18%. For the first half of 2021, Hertz Global recorded a tax expense of $33 million, which resulted in an effective tax rate of 63%.

The change in tax in the first half of 2022 compared to 2021 is driven by improvements in Hertz Global’s financial performance, as well as the non-taxable change in fair value of the Public Warrants in 2022, non-deductible bankruptcy costs incurred in 2021 and tax benefits associated with the restructuring in Europe recognized in 2021.

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As of June 30, 2022, the Company has approximately $670 million gross, or $141 million U.S. federal tax effected, of capital loss carryforward relating to a European restructuring for which a full valuation allowance is recorded. The Company filed a request for a pre-filing agreement with the Internal Revenue Service ("IRS") in December 2021, to determine whether the capital loss on the European restructuring qualifies as an ordinary loss. In May of 2022, the IRS began its review of the character of the loss on the European restructuring. A favorable outcome from this proceeding could result in a full or partial release of the valuation allowance.

Hertz

Three Months Ended
September 30, Nine Months Ended
September 30,
(In millions) 2021 2020 2021 2020
Professional fees and other bankruptcy related costs $ — $ 78 $ 257 $ 101
Loss on extinguishment of debt(1)
— — 191 —
Breakup fee(2)
— — 77 —
Contract settlements — — 25 —
Cancellation of share-based compensation grants(3)
— — (10) —
Net gain on settlement of liabilities subject to compromise — — (22) —
Other, net — — (5) —
Reorganization items, net $ — $ 78 $ 513 $ 101
For the three months ended June 30, 2022, Hertz recorded a tax provision of $178 million which resulted in an effective tax rate of 27%. For the three months ended June 30, 2021, the Company recorded a tax benefit of $46 million, which resulted in an effective tax rate of 90%.

As of June 30, 2022, the Company has approximately $670 million gross, or $141 million U.S. federal tax effected, of capital loss carryforward relating to a European restructuring for which a full valuation allowance is recorded. The Company filed a request for a pre-filing agreement with the Internal Revenue Service ("IRS") in December 2021, to determine whether the capital loss on the European restructuring qualifies as an ordinary loss. In May 2022, the IRS began its review of the character of the loss on the European restructuring. A favorable outcome from this proceeding could result in a full or partial release of the valuation allowance.

Note 8— Public Warrants, Equity and Earnings (Loss) Per Common Share – Hertz Global

Public Warrants

During the three and six months ended June 30, 2022, 44,700 and 189,890 Public Warrants were exercised, respectively, of which 13,223 and 46,650, respectively, were cashless exercises and 31,477 and 143,240, respectively, were exercised for $13.80 per share. As of June 30, 2022, a cumulative 6,230,170 Public Warrants have been exercised since their original issuance in June 2021. The Public Warrants are recorded at fair value in the accompanying unaudited condensed consolidated balance sheets as of June 30, 2022 and December 31, 2021. See Note 11, "Fair Value Measurements."

Share Repurchase Programs for Common Stock

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In June 2022, Hertz Global's Board of Directors approved a new share repurchase program (the "2022 Share Repurchase Program") that authorized additional repurchases of up to an incremental $2.0 billion worth of shares of Hertz Global's outstanding common stock. In June 2022, a total of 1,207,930 shares of Hertz Global's common stock were repurchased under this program at an average share price of $16.56 for an aggregate purchase price of $20 million. These amounts are included in treasury stock in the accompanying Hertz Global unaudited condensed consolidated balance sheet as of June 30, 2022.

Hertz Global funded the share repurchases with available cash and dividend distributions from Hertz.

Computation of Earnings (Loss) Per Common Share

The following table sets forth the computation of basic and diluted earnings (loss) per common share:



	Three Months Ended June 30,				Six Months Ended June 30,
(In millions, except per share data) (1)	2022		2021		2022		2021
Numerator:


Net income (loss) attributable and available to Hertz Global common stockholders, basic	$	940	$	(168)	$	1,366	$	21
Change in fair value of Public Warrants	(461)		—		(511)		—

Net income (loss) available to Hertz Global common stockholders, diluted	$	479	$	(168)	$	856	$	21
Denominator:


Basic weighted-average common shares outstanding	398		160		415		158
Dilutive effect of stock options, RSUs and PSUs	1		—		1		—
Dilutive effect of Public Warrants	25		—		27		—
Diluted weighted-average shares outstanding	424		160		443		158

Antidilutive stock options, RSUs and PSUs	7		1		6		1
Total antidilutive	7		1		6		1
Earnings (loss) per common share:
Basic	$	2.36	$	(1.05)	$	3.29	$	0.13
Diluted	$	1.13	$	(1.05)	$	1.93	$	0.13

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Note 9—Stock-Based Compensation

Stock Options

A summary of stock option activity for the first half of 2022 is presented below:


Options	Shares	Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Term (years)	Aggregate Intrinsic Value (In millions)
Outstanding as of December 31, 2021	3,678,855	$	26.17	9.9	$	—
Granted	—	—		—	—
Exercised	—	—		—	—
Forfeited or Expired	(244,640)	26.17		—	—
Outstanding as of June 30, 2022	3,434,215	—		9.4	—
Exercisable as of June 30, 2022	(206,440)	26.17		9.4	—
Non-vested as of June 30, 2022	3,227,775

Performance Stock Units ("PSUs")

A summary of the PSU activity for the first half of 2022 is presented below:


	Shares	Weighted- Average Fair Value		Aggregate Intrinsic Value (In millions)
Outstanding as of December 31, 2021	—	$	—	$	—
Granted	9,928,917	17.73		—
Vested	—	—		—
Forfeited or Expired	(19,029)	22.02		—
Outstanding as of June 30, 2022	9,909,888	17.72		157

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	Grants
Assumption	2022
Expected volatility	68		%
Expected dividend yield	—		%
Expected term (years)	5
Risk-free interest rate	1.71		%
Weighted-average grant date fair value	$	17.61

Restricted Stock and Restricted Stock Units ("RSUs")

A summary of RSU activity for the first half of 2022 is presented below:


	Shares	Weighted- Average Fair Value		Aggregate Intrinsic Value (In millions)
Outstanding as of December 31, 2021	1,726,286	$	26.17	$	43
Granted	3,353,698	20.60		—
Vested	(568,812)	26.17		—
Forfeited or Expired	(119,604)	24.85		—
Outstanding as of June 30, 2022	4,391,568	21.95		70

Additional information pertaining to RSU activity is as follows:


	Six Months Ended June 30,
	2022
Total fair value of awards that vested (in millions)	$	15
Weighted-average grant-date fair value of awards granted	$	20.60

RSU grants issued in 2022 vest ratably over a period of two to four years. RSU grants issued in 2021 vest ratably over a period of three years.

Deferred Stock Units

As of June 30, 2022, there were approximately 48,000 outstanding shares of deferred stock units under the 2021 Omnibus Plan.

Note 10—Financial Instruments

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None of the Company's financial instruments have been designated as hedging instruments as of June 30, 2022 and December 31, 2021.

Interest Rate Risk

The Company uses a combination of interest rate caps and swaps to manage its exposure to interest rate movements and to manage its mix of floating and fixed-rate debt.

Currency Exchange Rate Risk

The Company uses foreign currency exchange rate derivative financial instruments to manage its currency exposure resulting from intercompany transactions and other cross currency obligations.

Fair Value

The following table summarizes the estimated fair value of financial instruments:


	Fair Value of Financial Instruments
	Asset Derivatives(1)				Liability Derivatives(1)
(In millions)	June 30, 2022		December 31, 2021		June 30, 2022		December 31, 2021
Interest rate instruments	$	99	$	12	$	—	$	—
Foreign currency forward contracts	2		1		6		2
Total	$	101	$	13	$	6	$	2

Note 11—Fair Value Measurements

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Fair Value Disclosures

Debt Obligations



	June 30, 2022				December 31, 2021
(In millions)	Nominal Unpaid Principal Balance		Aggregate Fair Value		Nominal Unpaid Principal Balance		Aggregate Fair Value
Non-Vehicle Debt	$	3,045	$	2,642	$	3,055	$	3,065
Vehicle Debt	10,462		9,939		7,954		7,908
Total	$	13,507	$	12,581	$	11,009	$	10,973

Assets and Liabilities Measured at Fair Value on a Recurring Basis


	June 30, 2022								December 31, 2021
(In millions)	Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3		Total

Assets:
Cash equivalents and restricted cash equivalents	$	794	$	—	$	—	$	794	$	1,678	$	—	$	—	$	1,678

Liabilities:
Public Warrants	$	811	$	—	$	—	$	811	$	1,324	$	—	$	—	$	1,324

Cash Equivalents and Restricted Cash Equivalents

Public Warrants

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Financial Instruments

Note 12—Contingencies and Off-Balance Sheet Commitments

Legal Proceedings

Self-Insured Liabilities

The Company is currently a defendant in numerous actions and has received numerous claims on which actions have not yet commenced for self-insured liabilities arising from the operation of motor vehicles rented from the Company. The obligation for self-insured liabilities on self-insured U.S. and international vehicles, as stated in the accompanying unaudited condensed consolidated balance sheets, represents an estimate for both reported accident claims not yet paid and claims incurred but not yet reported. The related liabilities are recorded on an undiscounted basis and are based on rental volume and actuarial evaluations of historical accident claim experience and trends, as well as future projections of ultimate losses, expenses, premiums and administrative costs. As of June 30, 2022 and December 31, 2021, the Company's liability recorded for self-insured liabilities is $470 million and $463 million, respectively. The Company believes that its analysis is based on the most relevant information available, combined with reasonable assumptions. The liability is subject to significant uncertainties. The adequacy of the liability is regularly monitored based on evolving accident claim history and insurance related legislation changes. If the Company's estimates change or if actual results differ from these assumptions, the amount of the recorded liability is adjusted to reflect these results.

Loss Contingencies

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vigorously defend against the claims in this matter. The Company cannot predict the outcome or timing of this litigation.

Claims Relating to Alleged False Arrests - As a large company, we are subject to various proceedings, lawsuits, disputes, inquiries, and claims arising in the ordinary course of our business. One series of claims involves claimants seeking monetary damages from the Company in the Bankruptcy Court and Delaware Superior Court in connection with allegations that police detained or arrested them in error after the Company reported their rental cars as stolen. These claims arise from actions allegedly taken by the Company prior to emergence from its bankruptcy reorganization. The overwhelming majority of these cases involve vehicles that were not returned to the Company within a reasonable time period following their contracted return date. These claims have been the subject of press coverage and the Company has received inquiries on the matter from certain elected officials. The Company will continue to defend itself as appropriate and has established policies to help ensure proper treatment of its customers as well as to prosecute those involved in the theft of services or assets of the Company. The Company has made settlement offers to certain claimants, and may continue to do so from time to time in the future. We currently believe that the eventual outcome of these claims will not have a materially adverse effect on the Company’s business, financial condition, results of operations or cash flows. In addition, in May 2022, the Company filed a complaint against several of its insurers seeking a determination of its rights under its commercial general liability, and directors and officers liability, insurance policies for these alleged claims in a declaratory judgment action pending in Delaware Superior Court, captioned Hertz Global Holdings, Inc. et al. v. ACE American Insurance Co. et al., C.A. No. N22C-05-130 MMJ (CCLD).

Other Proceedings

Litigation Against Former Executives - The Company filed litigation in the U.S. District Court for the District of New Jersey against former executives Mark Frissora, Elyse Douglas and John Jefferey Zimmerman on March 25, 2019, and in state court in Florida against former executive Scott Sider on March 28, 2019. The complaints predominantly allege breach of contract and seek repayment of incentive-based compensation received by the defendants in connection with restatements included in the former Hertz Global Holdings, Inc. ("Old Hertz Holdings") Form 10-K for the year ended December 31, 2014 and related accounting for prior periods. The Company is also seeking recovery for the costs of an SEC investigation that resulted in an administrative order on December 31, 2018 with respect to events generally involving the restatements included in Old Hertz Holdings Form 10-K for the year ended December 31, 2014 and other damages resulting from the necessity of the restatements. The Company is pursuing these legal proceedings in accordance with its clawback policy and contractual rights. In October 2019, the Company entered into a confidential Settlement Agreement with Elyse Douglas. In September and October 2020, the judge in the New Jersey action entered orders requiring the remaining parties and applicable insurers to attend and participate in mediation. The attorneys in the Florida action voluntarily agreed to participate in the same mediation which was held on November 30, 2020. The mediation was unsuccessful, but settlement discussions continued and, on April 14, 2021, the Bankruptcy Court approved a Settlement Agreement between the Company and Scott Sider. The Florida action is now closed. On December 29, 2021, the Company entered into a settlement agreement with Jeff Zimmerman, leaving Mark Frissora as the sole remaining defendant in this litigation. Fact and expert discovery have now been completed in the New Jersey action with competing dispositive motions due by September 30, 2022. Pursuant to the agreements governing the separation of Herc Holdings Inc. from Hertz Global

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that occurred on June 30, 2016, Herc Holdings Inc. is entitled to 15% of the net proceeds of any repayment or recovery from these cases.

Indemnification Obligations

In the ordinary course of business, the Company has executed contracts involving indemnification obligations customary in the rental car industry and indemnifications specific to a transaction such as the sale of a business. These indemnification obligations might include claims relating to the following: environmental matters; intellectual property rights; governmental regulations and employment-related matters; customer, supplier and other commercial contractual relationships and financial matters. Specifically, the Company has indemnified various parties for the costs associated with remediating numerous hazardous substance storage, recycling or disposal sites in many states and, in some instances, for natural resource damages. The amount of any such expenses or related natural resource damages for which the Company may be held responsible could be substantial. In addition, Hertz entered into customary indemnification agreements with Hertz Holdings and certain of the Company's stockholders and their affiliates pursuant to which Hertz Holdings and Hertz will indemnify those entities and their respective affiliates, directors, officers, partners, members, employees, agents, representatives and controlling persons, against certain liabilities arising out of performance of a consulting agreement with Hertz Holdings and each of such entities and certain other claims and liabilities, including liabilities arising out of financing arrangements or securities offerings. The Company has entered into customary indemnification agreements with each of its directors and certain of its officers. Performance under these indemnification obligations would generally be triggered by a breach of terms of the contract or by a third-party claim. In connection with the separation of the rental car business from the equipment rental business in 2016, the Company executed an agreement with Herc Holdings Inc. that contains mutual indemnification clauses and a customary indemnification provision with respect to liability arising out of or resulting from assumed legal matters. The Company regularly evaluates the probability of having to incur costs associated with these indemnification obligations and has accrued for expected losses that are probable and estimable.

Note 13—Related Party Transactions

Transactions and Agreements between Hertz Holdings and Hertz

In May 2021, upon expiration of a loan originated in May 2020 between Hertz Holdings and Hertz, Hertz entered into a new master loan agreement with Hertz Holdings for a facility size of $25 million with an expiration in May 2022 (the "2021 Master Loan"). The interest rate was based on the U.S. Dollar LIBOR rate plus a margin. The 2021 Master Loan expired according to its terms and accordingly, as of June 30, 2022, there is no outstanding balance under the 2021 Master Loan.

767 Auto Leasing LLC

In January 2018, Hertz entered into a Master Motor Vehicle Lease and Management Agreement (the “767 Lease Agreement”) pursuant to which Hertz granted 767 Auto Leasing LLC (“767”), an entity affiliated with a related party until May 2020, the option to acquire certain vehicles from Hertz. During the three and six months ended June 30, 2021, 767 distributed $5 million and $15 million, respectively, to American Entertainment Properties Corp. along with the return of certain vehicles. The 767 Lease Agreement was terminated effective October 31, 2021. Prior to the termination of the 767 Lease Agreement, the Company determined that it was the primary beneficiary of 767 due to its power to direct the activities of 767 that most significantly impacted 767's economic performance and the Company's obligation to absorb 25% of 767's gains/losses and, accordingly, 767 was consolidated by the Company as a VIE.

Note 14—Segment Information

The Company’s chief operating decision maker ("CODM") assesses performance and allocates resources based upon the financial information for the Company’s reportable segments. The Company has identified 2 reportable

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segments, which are consistent with its operating segments and organized based on the products and services provided and the geographic areas in which business is conducted, as follows:

•Americas RAC – rental of vehicles (cars, crossovers, vans and light trucks), as well as sales of value-added services, in the U.S., Canada, Latin America and the Caribbean; and

•International RAC – rental and leasing of vehicles (cars, crossovers, vans and light trucks), as well as sales of value-added services internationally and consists primarily of the Company's Europe and other international locations.

In the second quarter of 2021, as a result of the Donlen Sale, as disclosed in Note 3, "Divestitures," the All Other Operations reportable segment, which consisted primarily of the Company's former Donlen business, was no longer deemed a reportable segment.

In addition to its reportable segments and other operating activities, the Company has corporate operations ("Corporate") which includes general corporate assets and expenses and certain interest expense (including net interest on non-vehicle debt). Corporate includes other items necessary to reconcile the reportable segments to the Company's total amounts.

The following tables provide significant statement of operations and balance sheet information by reportable segment for each of Hertz Global and Hertz, as well as Adjusted EBITDA, the measure used to determine segment profitability.


	Three Months Ended June 30,				Six Months Ended June 30,
(In millions)	2022		2021		2022		2021
Revenues
Americas RAC	$	1,973	$	1,643	$	3,531	$	2,610
International RAC	371		230		623		415
Total reportable segments	2,344		1,873		4,154		3,025
All other operations(1)	—		—		—		136
Total Hertz Global and Hertz	$	2,344	$	1,873	$	4,154	$	3,161

Depreciation of revenue earning vehicles and lease charges, net
Americas RAC	$	61	$	80	$	(32)	$	290
International RAC	45		36		79		69


Total Hertz Global and Hertz	$	106	$	116	$	47	$	359

Adjusted EBITDA
Americas RAC	$	770	$	664	$	1,411	$	690
International RAC	92		(1)		119		(9)
Total reportable segments	862		663		1,530		681
All other operations(1)	—		—		—		13
Corporate	(98)		(24)		(152)		(52)
Total Hertz Global and Hertz	$	764	$	639	$	1,378	$	642

(1) Substantially comprised of the Company's Donlen business, which was sold on March 30, 2021 as disclosed in Note 3, "Divestitures."

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	As of
(In millions)	June 30, 2022		December 31, 2021
Revenue earning vehicles, net
Americas RAC	$	10,728	$	7,897
International RAC	1,602		1,329
Total Hertz Global and Hertz	$	12,330	$	9,226
Total assets
Americas RAC	$	17,197	$	14,352
International RAC	3,245		2,978
Total reportable segments	20,442		17,330

Corporate	1,624		2,453
Total Hertz Global(1)	22,066		19,783
Corporate - Hertz	(1)		(3)
Total Hertz(1)	$	22,065	$	19,780

(1) The consolidated total assets of Hertz Global and Hertz as of June 30, 2022 and December 31, 2021 include total assets of VIEs of $838 million and $734 million, respectively, which can only be used to settle obligations of the VIEs. See "Pledges Related to Vehicle Financing" in Note 5, "Debt," for further information.

Reconciliations of Adjusted EBITDA by reportable segment to consolidated amounts are summarized below:

Hertz Global



	Three Months Ended June 30,				Six Months Ended June 30,
(In millions)	2022		2021		2022		2021
Adjusted EBITDA:
Americas RAC	$	770	$	664	$	1,411	$	690
International RAC	92		(1)		119		(9)
Total reportable segments	862		663		1,530		681
All other operations(1)	—		—		—		13
Corporate(2)	(98)		(24)		(152)		(52)
Total Hertz Global	764		639		1,378		642
Adjustments:
Non-vehicle depreciation and amortization	(36)		(50)		(69)		(104)
Non-vehicle debt interest, net(3)	(41)		(91)		(80)		(135)
Vehicle debt-related charges(4)	(9)		(26)		(16)		(54)

Restructuring and restructuring related charges(5)	(15)		(37)		(21)		(50)


Reorganization items, net(6)	—		(633)		—		(677)
Pre-reorganization charges and non-debtor financing charges(7)	—		(17)		—		(40)
Gain from the Donlen Sale(8)	—		8		—		400
Change in fair value of Public Warrants(9)	461		—		511		—
Unrealized gains (losses) on financial instruments(10)	21		—		65		—
Other items(11)	(26)		(8)		(93)		70
Income (loss) before income taxes	$	1,119	$	(215)	$	1,675	$	52

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Hertz



	Three Months Ended June 30,				Six Months Ended June 30,
(In millions)	2022		2021		2022		2021
Adjusted EBITDA:
Americas RAC	$	770	$	664	$	1,411	$	690
International RAC	92		(1)		119		(9)
Total reportable segments	862		663		1,530		681
All other operations(1)	—		—		—		13
Corporate(2)	(98)		(24)		(152)		(52)
Total Hertz	764		639		1,378		642
Adjustments:
Non-vehicle depreciation and amortization	(36)		(50)		(69)		(104)
Non-vehicle debt interest, net(3)	(41)		(91)		(80)		(135)
Vehicle debt-related charges(4)	(9)		(26)		(16)		(54)

Restructuring and restructuring related charges(5)	(15)		(37)		(21)		(50)



Reorganization items, net(6)	—		(469)		—		(513)
Pre-reorganization charges and non-debtor financing charges(7)	—		(17)		—		(40)
Gain from the Donlen Sale(8)	—		8		—		400
Unrealized gains (losses) on financial instruments(10)	21		—		65		—
Other items(11)	(26)		(8)		(93)		70
Income (loss) before income taxes	$	658	$	(51)	$	1,164	$	216

(1)Substantially comprised of the Company's Donlen business, which was sold on March 30, 2021 as disclosed in Note 3, "Divestitures."

(2)Represents other reconciling items primarily consisting of general corporate expenses, non-vehicle interest expense, as well as other business activities.

(3)In 2021, includes $8 million of loss on extinguishment of debt associated with the payoff and termination of the HIL Credit Agreement resulting from the implementation of the Plan of Reorganization.

(4)Represents vehicle debt-related charges relating to the amortization of deferred financing costs and debt discounts and premiums.

(5)Represents charges incurred under restructuring actions as defined in U.S. GAAP. Also includes restructuring related charges such as incremental costs incurred directly supporting business transformation initiatives.

(6)Represents charges incurred associated with the filing of and the emergence from the Chapter 11 Cases, as disclosed in Note 15, "Reorganization Items, Net."

(7)Represents charges incurred prior to the filing of the Chapter 11 Cases which are comprised of preparation charges for the reorganization, such as professional fees. Also, includes certain non-debtor financing and professional fee charges.

(8)Represents the net gain from the sale of the Company's Donlen business on March 30, 2021, as disclosed in Note 3, "Divestitures."

(9)Represents the change in fair value during the reporting period for the Company's outstanding Public Warrants.

(10)Represents unrealized gains (losses) on derivative financial instruments. See Note 10, "Financial Instruments."

(11)Represents miscellaneous items. For the three and six months ended June 30, 2022, primarily includes bankruptcy claims, certain professional fees and charges related to the settlement of bankruptcy claims and certain non-cash stock-based compensation charges. For the three and six months ended June 30, 2021, includes $100 million associated with the suspension of depreciation during the first quarter for the Donlen business while classified as held for sale, partially offset by letter of credit fees recorded in the first half of the year and charges for a multiemployer pension plan withdrawal liability recorded in the first quarter.

Note 15—Reorganization Items, Net

The Debtors incurred incremental costs as a result of the Chapter 11 Cases and settlement of liabilities under the Plan of Reorganization which were recorded as reorganization items, net in the accompanying unaudited condensed consolidated statements of operations for the three and six months ended June 30, 2021.

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The following tables summarize reorganization items, net:

Hertz Global



(In millions)	Three Months Ended June 30, 2021		Six Months Ended June 30, 2021


Professional fees and other bankruptcy related costs	$	199	$	257
Loss on extinguishment of debt(1)	191		191
Backstop fee	164		164
Breakup fee(2)	77		77
Contract settlements	25		25
Cancellation of share-based compensation grants(3)	(10)		(10)
Net gain on settlement of liabilities subject to compromise	(11)		(22)
Other, net	(2)		(5)
Reorganization items, net	$	633	$	677

Hertz


(In millions)	Three Months Ended June 30, 2021		Six Months Ended June 30, 2021

Professional fees and other bankruptcy related costs	$	199	$	257
Loss on extinguishment of debt(1)	191		191
Breakup fee(2)	77		77
Contract settlements	25		25
Cancellation of share-based compensation grants(3)	(10)		(10)
Net gain on settlement of liabilities subject to compromise	(11)		(22)
Other, net	(2)		(5)
Reorganization items, net	$	469	$	513

(1) Includes loss on extinguishment of debt resulting from the implementation of the Plan of ~~Reorganization on the Effective Date.~~Reorganization. Primarily composed of write offs of unamortized deferred loan origination costs and early termination fees associated with terminated debt agreements. ~~See Note 6, "Debt," for further information.~~

(2) Breakup fee paid to prior plan sponsors ~~Centerbridge Partners, L.P., Warburg Pincus LLC, Dundon Capital Partners, LLC~~ and certain of their respective affiliates and certain holders of the ~~Senior Notes~~senior notes upon ~~Emergence~~emergence from Chapter 11 in accordance with an ~~Equity Purchase~~equity purchase and ~~Commitment and Agreement~~commitment agreement entered into on April 3, 2021, which was subsequently terminated.

(3) ~~See Note 12, Stock-Based Compensation for further details.~~

~~Cash payments during the three months ended September~~On June 30, 2021, in accordance with the Plan of Reorganization, all outstanding equity awards under the then-existing incentive plan (the "Omnibus Plan") were cancelled without any distribution and ~~2020 totaled $5~~the Omnibus Plan was deemed to be cancelled. As a result of the equity awards cancellations, the Company recognized $10 million ~~and $35 million, respectively. Cash payments during~~related to the ~~nine months ended September 30, 2021 and 2020 totaled $485 million and $35 million, respectively. The Company incurred $175 million~~unrecognized portion of charges during the year ended December 31, 2020 comprised primarily of professional fees, of which $102 million was paid as of December 31, 2020 and $46 million and $19 million were unpaid and recordedshare-based compensation in ~~accrued liabilities and accounts payable, respectively,~~reorganization expense in the accompanying unaudited condensed consolidated ~~balance sheet. The Company had~~statements of operations for the three and six months ended June 30, 2021.

As of December 31, 2021, $25 million ~~of unpaid reorganization charges~~was recorded in accounts payable in the accompanying unaudited condensed consolidated balance sheet, aswhich was paid through the claim settlement process during the first half of ~~September 30, 2021.~~2022. Cash payments during the first half of 2021 were $480 million.

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HERTZ GLOBAL HOLDINGS, INC. AND SUBSIDIARIES

THE HERTZ CORPORATION AND SUBSIDIARIES

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Hertz Global Holdings, Inc. (together with its consolidated subsidiaries and variable interest entities, "Hertz Global") is a holding company and its principal, wholly-owned subsidiary is The Hertz Corporation (together with its consolidated subsidiaries and variable interest entities, "Hertz"). Hertz Global consolidates Hertz for financial statement purposes, and Hertz comprises approximately the entire balance of Hertz ~~Global's~~Global’s assets, liabilities and operating cash flows. In addition, ~~Hertz's~~Hertz’s operating revenues and operating expenses comprise nearly 100% of Hertz ~~Global's~~Global’s revenues and operating expenses. As such, Management's Discussion and Analysis of Financial Condition and Results of Operations ("MD&A") that follows herein is for Hertz and also applies to Hertz Global in all material respects, unless otherwise noted. Differences between the operations and results of Hertz and Hertz Global are separately disclosed and explained. We sometimes use the words ~~"we," "our," "us"~~“we,” “our,” “us,” and the ~~"Company"~~“Company” in this MD&A for disclosures that relate to all of Hertz and Hertz Global.

The statements in this MD&A regarding industry outlook, our expectations regarding the performance of our business and the other non-historical statements are forward-looking statements. These forward-looking statements are subject to numerous risks and uncertainties. The following MD&A provides information that we believe to be relevant to an understanding of our consolidated financial condition and results of operations.

This MD&A should be read in conjunction with the MD&A presented in our ~~2020~~2021 Form 10-K together with the sections entitled “Cautionary Note Regarding Forward-Looking Statements,” Part II, Item 1A, "Risk Factors,” and our unaudited condensed consolidated financial statements and accompanying notes included in Part I, Item 1 of this Quarterly Report on Form 10-Q for the quarterly period ended ~~September~~June 30, ~~2021~~2022 (this ~~"Report"~~"Quarterly Report"), which include additional information about our accounting policies, practices and the transactions underlying our financial results. The preparation of our unaudited condensed consolidated financial statements in conformity with U.S. GAAP requires us to make estimates and assumptions that affect the reported amounts in our unaudited condensed consolidated financial statements and the accompanying notes including revenue earning vehicle depreciation and various claims and contingencies related to lawsuits, taxes and other matters arising during the normal course of business. We apply our best judgment, our knowledge of existing facts and circumstances and our knowledge of actions that we may undertake in the future in determining the estimates that will affect our unaudited condensed consolidated financial statements. We evaluate our estimates on an ongoing basis using our historical experience, as well as other factors we believe to be appropriate under the circumstances, such as current economic conditions, and adjust or revise our estimates as circumstances change. As future events and their effects cannot be determined with precision, actual results may differ from these estimates.

In this MD&A we refer to the following non-GAAP measure and key metrics:

•Adjusted Corporate EBITDA – important non-GAAP measure to management because it allows management to assess the operational performance of our business, exclusive of certain items, and allows management to assess the performance of the entire business on the same basis as the segment measure of profitability. Management believes that it is important to investors for the same reasons it is important to management and because it allows investors to assess our operational performance on the same basis that management uses internally. Adjusted EBITDA, the segment measure of profitability and accordingly a GAAP measure, is calculated exclusive of certain items which are largely consistent with those used in the calculation of Adjusted Corporate EBITDA.

•Vehicle Utilization – Effective in the first quarter of 2022, in connection with the appointment of the new CEO (who serves as our Chief Operating Decision Maker) and arising from significantly increased activity in vehicle dispositions, we began using Average Rentable Vehicles in the denominator in our calculation of Vehicle Utilization. Vehicle Utilization is calculated by dividing total Transaction Days by Available Car Days. Available Car Days represents Average Rentable Vehicles multiplied by the number of days in a given period. Average Rentable Vehicles excludes vehicles for sale on our retail lots or actively in the process of being sold through other disposition channels. We believe this is a better measure of the productivity of our rental fleet as it is unaffected by fluctuations in disposition activity. Accordingly, prior periods have been restated to conform with the revised definition.

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HERTZ GLOBAL HOLDINGS, INC. AND SUBSIDIARIES

THE HERTZ CORPORATION AND SUBSIDIARIES

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED)

•Depreciation Per Unit Per Month – important key metric to management and investors as depreciation of revenue earning vehicles and lease charges is one of our largest expenses for the vehicle rental business and is driven by the number of vehicles, expected residual values at the expected time of disposal and expected hold period of the vehicles. Depreciation Per Unit Per Month is reflective of how we are managing the costs of our vehicles and facilitates a comparison with other participants in the vehicle rental industry.

•Total Revenue Per Transaction Day ("Total RPD," also referred to as "pricing") – important key metric to management and investors as it represents a measurement of the changes in underlying pricing in the vehicle rental business and encompasses the elements in vehicle rental pricing that management has the ability to control. Effective ~~during~~in the ~~three months ended September 30,~~third quarter of 2021, we revised our calculation of Total RPD to include ancillary retail vehicle sales revenues to better align with current industry practice, and accordingly, prior periods have been restated to conform with the revised definition.

•Total Revenue Per Unit Per Month ("Total RPU") – important key metric to management and investors as it provides a measure of revenue productivity relative to the ~~total~~ number of vehicles in our rental fleet whether

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~~HERTZ GLOBAL HOLDINGS, INC. AND SUBSIDIARIES~~

~~THE HERTZ CORPORATION AND SUBSIDIARIES~~

~~ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED)~~

owned or leased ("Average Rentable Vehicles" ~~or "fleet capacity"~~). Effective ~~during~~in the ~~three months ended September 30,~~third quarter of 2021, we revised our calculation of Total RPU to include ancillary retail vehicle sales revenues to better align with current industry practice and ~~accordingly, prior~~effective in the first quarter of 2022, we revised to use Average Rentable Vehicles as the denominator in our calculation of Total RPU. Average Rentable Vehicles excludes vehicles for sale on the Company’s retail lots or actively in the process of being sold through other disposition channels. We believe this is a better measure of the productivity of our rental fleet as it is unaffected by fluctuations in disposition activity. There has been no change to revenue as used in the numerator of the calculation which includes vehicle rental and rental related revenues, licensee revenue and ancillary retail vehicle sales revenue. Prior periods have been restated to conform with the revised definition.

•Transaction Days – important key metric to management and investors as it represents the number of revenue generating days ("volume"). It is used as a component to measure Total RPD and Vehicle Utilization. Transaction Days represent the total number of 24-hour periods, with any partial period counted as one Transaction Day, that vehicles were on rent (the period between when a rental contract is opened and closed) in a given period. Thus, it is possible for a vehicle to attain more than one Transaction Day in a 24-hour period.

•Vehicle Utilization – important key metric to management and investors because it is the measurement of the proportion of our vehicles that are being used to generate revenues relative to fleet capacity. Higher Vehicle Utilization means more vehicles are being utilized to generate revenues.

Our non-GAAP measure and key metrics should not be considered in isolation and should not be considered superior to, or a substitute for, financial measures calculated in accordance with U.S. GAAP. The above non-GAAP measure and key metrics are defined, and the non-GAAP measure is reconciled to its most comparable U.S. GAAP measure, in the "Footnotes to the Results of Operations and Selected Operating Data by Segment Tables" section of this MD&A.

OUR COMPANY

Hertz Holdings was incorporated in Delaware in 2015 to serve as the top-level holding company for Rental Car Intermediate Holdings, LLC, which wholly owns Hertz, Hertz Global's primary operating company. Hertz was incorporated in Delaware in 1967 and is a successor to corporations that have been engaged in the vehicle rental and leasing business since 1918. ~~We are engaged principally in the business of renting vehicles primarily through our Hertz, Dollar and Thrifty brands.~~

We operate our vehicle rental business globally from company-owned, licensee and franchisee locations in North America, Europe, Latin America, Africa, Asia, Australia, the Caribbean, the Middle East and New Zealand. We also sell vehicles through Hertz Car Sales and operate the Firefly vehicle rental brand and Hertz 24/7 car sharing business in international markets. Previously, in addition to vehicle rental, we provided integrated vehicle leasing and fleet management solutions through our Donlen subsidiary, which was sold on March 30, 2021.

~~OVERVIEW OF OUR BUSINESS AND OPERATING ENVIRONMENT~~

~~Impact of COVID-19 on our Busines~~s

In March 2020, the World Health Organization declared COVID-19 a pandemic, affecting multiple global regions. The impact of this pandemic has been extensive in many aspects of society, which has resulted in significant disruptions to the global economy, as well as businesses around the world. In an effort to halt the spread of COVID-19, many governments around the world placed significant restrictions on travel, individuals voluntarily reduced their air and other travel in attempts to avoid the outbreak, and many businesses announced closures and imposed travel restrictions. In 2021, individuals across the globe have increasingly gained access to COVID-19 vaccinations, particularly in the U.S., resulting in COVID-19 case declines in many countries around the world. Many of the government-imposed restrictions have been lifted or eased, and travel, particularly domestic leisure travel, has experienced a strong rebound. There remains continued uncertainty about the duration of the negative impact from COVID-19 and its variants, including the length and scope of travel restrictions and business closures that may be imposed by governments of impacted countries or voluntarily undertaken by individuals and private businesses.

~~Voluntary Petitions for Bankruptcy and Emergence~~

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THE HERTZ CORPORATION AND SUBSIDIARIES

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED)

OVERVIEW OF OUR BUSINESS AND OPERATING ENVIRONMENT

Impact of COVID-19 on our Business Environment

In March 2020, the World Health Organization declared COVID-19 a pandemic, affecting multiple global regions. In an effort to halt the spread of COVID-19, many governments around the world placed significant restrictions on travel. Beginning in the second half of 2021, and continuing into 2022, many government-imposed restrictions have been lifted or eased, and travel, particularly domestic leisure travel, has experienced a strong rebound. However, there remains continued uncertainty about the duration of the COVID-19 pandemic and its variants, including the impact of the continuing global semiconductor microchip manufacturing shortage (the "Chip Shortage") and other supply chain constraints.

Voluntary Petitions for Bankruptcy and Emergence

On May ~~14, 2021.~~22, 2020, the Debtors filed voluntary petitions for relief under Chapter 11 of the Bankruptcy Court. On June 10, 2021, the Plan of Reorganization was confirmed by the Bankruptcy ~~Court. On~~Court and on June 30, 2021, ~~the Effective Date,~~ the Plan of Reorganization became effective ~~in accordance with its terms~~ and the Debtors emerged from Chapter 11. Additional information about the Chapter 11 Cases, including access to documents filed with the Bankruptcy Court, is available online at https://restructuring.primeclerk.com/hertz, a website administered by Prime Clerk. The information on this website is not incorporated by reference and does not constitute part of this Quarterly Report on Form 10-Q.

~~On the Effective Date, as a result of the Plan of Reorganization, we received cash proceeds of $7.5 billion comprised of:~~

•~~$2.8 billion from the purchase of Hertz Global common stock by the Plan Sponsors and certain other investment funds and entities;~~

•~~$1.6 billion from the purchase of Hertz Global common stock pursuant to the Rights Offering;~~

•~~$1.5 billion (less a 2% upfront discount and stock issuance fees) from the purchase of preferred stock of reorganized Hertz Global by Apollo; and~~

•~~$1.5 billion in proceeds from the Term Loans.~~

~~Such cash proceeds were used, in part, to provide payments to our stakeholders pursuant to the terms of the Plan of Reorganization as follows:~~

•~~the holders of administrative, priority and secured claims received payment in cash in full;~~

•~~the holders of the approximately $1.0 billion of obligations owed with respect to the DIP Credit Agreement received payment in cash in full;~~

•~~the holders of the Senior Term Loan, Senior RCF and Letter of Credit Facility received payment in cash in full with respect to all non-contingent liquidated claims;~~

•~~the holders of claims with respect to the Senior Second Priority Secured Notes received payment in cash in full;~~

•~~the holders of the €725 million European Vehicle Notes received payment in cash in full;~~

•~~the holders of the €257 million Second HIL Credit Agreement received payment in cash in full;~~

•the holders of claims with respect to the Senior Notes and the holders of claims with respect to the Alternative Letter of Credit Facility received payment in cash with respect to (i) all remaining principal, (ii) accrued and unpaid interest as of the Petition Date at the contract rate, and (iii) accrued and unpaid interest from the Petition Date to the Effective Date at the federal judgment rate (at such rate in effect as of the Petition Date), subject to the rights of creditors (if any) to bring a claim for the payment of additional interest and/or premiums; and

All of the Hertz Global equity interests existing as of the Effective Date were cancelled on such date in accordance with the Plan of Reorganization with existing equity holders receiving (i) cash in the amount of $1.53 per share of existing interests, (ii) their pro rata share of three percent of the common shares of reorganized Hertz Global, subject to dilution, and (iii) either new 30-year Public Warrants, for in the aggregate of up to 18% of reorganized Hertz Global common stock issued and outstanding on the Effective Date, subject to dilution and certain conditions, or subscription rights to participate in the Rights Offering as discussed below.

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~~HERTZ GLOBAL HOLDINGS, INC. AND SUBSIDIARIES~~

~~THE HERTZ CORPORATION AND SUBSIDIARIES~~

~~ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED)~~

closed the Rights Offering upon emergence from the Chapter 11 Cases on June 30, 2021. Pursuant to the terms of the EPCA, the Backstop Parties received a backstop fee equal in amount of $164 million (payable in shares of reorganized Hertz Global common stock valued at $10.00 per share).

On the Effective Date, in accordance with the Plan of Reorganization, reorganized Hertz Global issued 1,500,000 shares of Series A Preferred Stock to Apollo and received gross proceeds of $1.5 billion, less a 2% upfront discount and stock issuance fees.

On the Effective Date, in accordance with the Plan of Reorganization and the Public Warrant Agreement, reorganized Hertz Global issued 89,049,029 Public Warrants, subject to certain conditions. The Public Warrants are exercisable from the date of issuance until June 30, 2051 at which time all unexercised Public Warrants will expire and the rights of the holders of such expired Public Warrants will terminate. The Public Warrants have an initial exercise price of $13.80 and are subject to adjustment from time to time upon the occurrence of any payments of cash dividends and certain dilutive events.

On the Effective Date, reorganized Hertz entered into the First Lien Credit Agreement that provides for an aggregate amount of $2.8 billion comprised of the First Lien RCF in an aggregate committed amount of $1.3 billion plus Term Loans in an aggregate principal amount of $1.5 billion. Additionally, reorganized Hertz entered into a new HVF III ABS facility in an aggregate of $6.8 billion comprised of variable funding notes with a principal amount up to $2.8 billion and medium term notes in an aggregate principal amount of $4.0 billion.

For additional information about our on restructured debt and equity, see Note 6, "Debt," and Note 10, "Equity, Mezzanine Equity and Earnings (Loss) Per Share – Hertz Global," in Part 1, Item 1 of this Quarter Report on Form 10-Q.

In 2021, as a result of our actions to continue to eliminate costs, we (i) initiated a restructuring program in our International RAC segment; and (ii) reduced our capital expenditures by $7 million, or 41%, and by $48 million, or 54%, in the three and nine ended September 30, 2021, respectively, compared to the 2020 periods. We continue to review our cost structure and fleet size to align with expected rental car volumes, including in response to continued increases in travel as indicated by traveler throughput increases beginning in March 2021 and steadily rising thereafter, as measured by the U.S. Transportation Security Administration.

Our Business

We are engaged principally in the business of renting vehicles primarily through our Hertz, Dollar and Thrifty brands. ~~In addition to vehicle rental, we provided integrated vehicle leasing and fleet management solutions through our Donlen business, which was sold on March 30, 2021.~~ Our profitability is primarily a function of the volume, mix and pricing of rental transactions and the utilization of vehicles, the related ownership cost of vehicles and other operating costs. Significant changes in the purchase price or residual values of vehicles or interest rates can have a significant effect on our profitability depending on our ability to adjust pricing for these changes. We continue to balance our mix of non-program and program vehicles based on market conditions, including residual values. Our business requires significant expenditures for vehicles, and as such, we require substantial liquidity to finance such expenditures.

Our strategy ~~includes optimization~~is focused on excellence in execution of our ~~vehicle~~ rental operations, ~~disciplined performance management~~electrification of the fleet, shared mobility, connected cars and ~~evaluation of all locations and~~exiting vehicles from the ~~pursuit of same-store sales growth. In October 2021, we announced several new initiatives as part of a plan~~fleet directly to offer the largest electric vehicle ("EV") rental fleet in North America, to lead in providing access to EVs for ride sharing and to digitize our vehicle disposition process. These efforts are aimed at positioning Hertz as a leader in sustainable mobility and technology.

consumers. Our revenues are primarily derived from rental and related charges and consist of worldwide vehicle rental revenues from all company-operated vehicle rental operations ~~including~~and charges to customers for the reimbursement of costs incurred relating to airport concession fees and vehicle license fees, the fueling of vehicles and revenues associated with value-added services, including the sale of loss or collision damage waivers, theft protection, liability and

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~~HERTZ GLOBAL HOLDINGS, INC. AND SUBSIDIARIES~~

~~THE HERTZ CORPORATION AND SUBSIDIARIES~~

~~ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED)~~

personal accident/effects insurance coverage, premium emergency roadside service and other products and fees. Also included are ancillary revenues associated with retail vehicle sales and certain royalty fees from our franchisees (such fees are less than 2% of total revenues each period).

~~We also had revenues from vehicle leasing and fleet management services by our Donlen business, which was sold on March 30, 2021.~~

Our expenses primarily consist of:

•Direct vehicle and operating expense ("DOE"), primarily wages and related benefits; commissions and concession fees paid to airport authorities, travel agents and others; facility, self-insurance and reservation costs; and other costs relating to the operation and rental of revenue earning vehicles, such as damage, maintenance and fuel costs;

•Depreciation expense and lease charges, net relating to revenue earning vehicles, including gains and losses and related costs associated with the disposal of vehicles;

•Depreciation and amortization expense relating to non-vehicle assets;

•Selling, general and administrative expense ("SG&A"), which includes advertising costs and administrative personnel costs, along with costs for information technology and finance transformation programs; and

•Interest expense, ~~net; and~~net.

•~~Reorganization items, net, which includes charges associated with the Chapter 11 Cases, primarily professional fees.~~

~~Our Reportable Segments~~

In the second quarter of 2021, in connection with the Chapter 11 Emergence, and changes in how our CODM regularly reviews operating results and allocates resources, we revised our reportable segments to include Canada, Latin America and the Caribbean in our Americas RAC reportable segment, which were previously included in our International RAC reportable segment. Accordingly, prior periods have been restated to conform with the revised presentation. We have identified two reportable segments, which are organized based on the products and services provided by our operating segments and the geographic areas in which our operating segments conduct business, as follows:

•~~Americas RAC – Rental of vehicles, as well as sales of value-added services, in the U.S., Canada, Latin America and the Caribbean;~~

•International RAC – Rental and leasing of vehicles, as well as sales of value-added services, internationally and consists primarily of our Europe operating segment and other international operating segments, which are aggregated into a reportable segment based primarily upon similar economic characteristics, products and services, customers, delivery methods and general regulatory environments.

~~In addition to the above reportable segments, we have corporate operations. We assess performance and allocate resources based upon the financial information for our operating segments.~~

~~Seasonality~~

Our vehicle rental operations are a seasonal business, with decreased levels of business in the winter months and heightened activity during the spring and summer months ("our peak season") for the majority of countries where we generate our revenues. To accommodate increased demand, we typically increase our available fleet and staff during the second and third quarters of the year. However, the continuing semiconductor microchip manufacturing shortage (the "Chip Shortage") has impacted our ability to obtain a sufficient supply of new vehicles to align with rental demands and may continue to do so through the first quarter of 2022. The Chip Shortage may result in increased vehicle acquisition costs. A number of our other major operating costs, including airport concession fees, commissions and vehicle liability expenses, are directly related to revenues or transaction volumes. In addition, our management expects to utilize enhanced process improvements, including utilization initiatives and the use of our

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THE HERTZ CORPORATION AND SUBSIDIARIES

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED)

~~information technology systems,~~we generate our revenues. To accommodate increased demand, we increase our available fleet and staff. As demand declines, fleet and staff are decreased accordingly. A number of our other major operating costs, including airport concession fees, commissions and vehicle liability expenses, are directly related to ~~help manage our variable costs.~~revenues or transaction volumes. We also maintain a flexible workforce, with a significant number of part-time and seasonal workers. Certain operating expenses, including real estate taxes, rent, insurance, utilities, maintenance and other facility-related expenses, ~~the costs of operating our information technology systems~~ and minimum staffing costs, remain fixed and cannot be adjusted for ~~seasonal~~ demand. ~~Prior to~~

Our Reportable Segments

We have identified two reportable segments, which are consistent with our operating segments and organized based on the ~~Effective Date,~~products and services provided and the ~~Bankruptcy Court approved~~geographic areas in which business is conducted, as follows:

•Americas RAC – Rental of vehicles, as well as sales of value-added services, in the ~~rejection~~U.S., Canada, Latin America and the Caribbean; and

•International RAC – Rental and leasing of vehicles, as well as sales of value-added services, internationally and consists primarily of our Europe and other international locations.

In the second quarter of 2021, as a result of the ~~real property leases with respect~~Donlen Sale, the All Other Operations reportable segment, which was primarily comprised of the Donlen business, was no longer deemed to ~~278 off airport locations and 34 airport locations with unexpired leases were authorized by the Bankruptcy Court for rejection in our Americas RAC~~be a reportable segment.

~~Three~~In addition to the above reportable segments, we have corporate operations. We assess performance and ~~Nine~~allocate resources based upon the financial information for our operating segments.

Three Months Ended ~~September~~June 30, ~~2021~~2022 Operating Overview

Effective in the first quarter of 2022, we began using Average Rentable Vehicles in the denominator in our calculation of Vehicle Utilization and Total RPU. Average Rentable Vehicles excludes vehicles for sale on our retail lots or actively in the process of being sold through other disposition channels. We believe this is a better measure of the productivity of our rental fleet as it is unaffected by fluctuations in disposition activity. Accordingly, prior periods have been restated to reflect this change. Effective during the ~~three months ended September 30,~~third quarter of 2021, we changed our definition of Total RPD and Total RPU to include ancillary retail ~~vehicle~~ sales revenues to better align with current industry practice, and accordingly, prior periods have been restated to conform with the revised ~~definition.~~definitions.

The following charts provide the period-over-period change for several key factors influencing our results for the three and ~~nine~~six months ended ~~September~~June 30, ~~2021~~2022 and ~~2020.~~2021.

~~(1) Includes impact of foreign currency exchange at average rates ("fx").~~

~~(2) Results shown are in constant currency as of December 31, 2020.~~

~~(3) The percentages shown in this chart reflect Vehicle Utilization versus period-over-period change.~~

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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED)

(1) Includes impact of foreign currency exchange at average rates ("fx").

(2) Results shown are in constant currency as of December 31, 2021.

(3) The percentages shown in this chart reflect Vehicle Utilization versus period-over-period change.

For more information on the above, see the discussion of our results on a consolidated basis and by segment that follows herein. In this MD&A, certain amounts in the following tables are denoted as in millions. Amounts such as percentages are calculated from the underlying numbers in thousands, and as a result, may not agree to the amount when calculated from the tables in millions.

~~Critical Accounting Estimates~~

~~The continued uncertainty~~

Table of ~~the impact from COVID-19 could have a material impact to certain critical accounting estimates, and as a result, may have an adverse impact on our future operating results.~~Contents

HERTZ GLOBAL HOLDINGS, INC. AND SUBSIDIARIES

THE HERTZ CORPORATION AND SUBSIDIARIES

~~Revenue Earning Vehicles~~ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED)

CONSOLIDATED RESULTS OF OPERATIONS – HERTZ



	Three Months Ended June 30,				Percent Increase/(Decrease)	Six Months Ended June 30,				Percent Increase/(Decrease)
($ In millions)	2022		2021			2022		2021
Total revenues	$	2,344	$	1,873	25%	$	4,154	$	3,161	31%
Direct vehicle and operating expenses	1,199		946		27	2,252		1,724		31
Depreciation of revenue earning vehicles and lease charges, net	106		116		(9)	47		359		(87)
Non-vehicle depreciation and amortization	36		50		(28)	69		104		(34)
Selling, general and administrative expenses	257		172		50	492		321		53
Interest expense, net:
Vehicle	45		98		(54)	50		202		(75)
Non-vehicle	41		91		(55)	80		135		(40)
Interest expense, net	86		189		(55)	130		337		(62)


Other (income) expense, net	2		(10)		NM	—		(13)		NM
Reorganization items, net	—		469		(100)	—		513		(100)
(Gain) from the sale of a business	—		(8)		(100)	—		(400)		(100)
Income (loss) before income taxes	658		(51)		NM	1,164		216		NM
Income tax (provision) benefit	(178)		46		NM	(308)		(33)		NM
Net income (loss)	480		(5)		NM	856		183		NM
Net (income) loss attributable to noncontrolling interests	—		1		(100)	—		2		(100)
Net income (loss) attributable to Hertz	$	480	$	(4)	NM	$	856	$	185	NM
Adjusted Corporate EBITDA(a)	$	764	$	639	19	$	1,378	$	642	NM

The footnote in the table above is shown in the "Footnotes to the Results of Operations and Selected Operating Data by Segment Tables" section of this MD&A.

NM - Not meaningful

~~Our principal assets are~~Three Months Ended June 30, 2022 Compared with Three Months Ended June 30, 2021

Total revenues increased $471 million in the second quarter of 2022 compared to 2021 due primarily to increased travel demand. Total revenues increased $331 million and $141 million in our Americas RAC and International RAC segments, respectively. Excluding an unfavorable $3 million fx impact, Americas RAC revenues increased $334 million due primarily to higher volume and pricing. Excluding an unfavorable $41 million fx impact, revenues for our International RAC segment increased $182 million due primarily to higher pricing and volume.

DOE increased $252 million in the second quarter of 2022 compared to 2021 due primarily to an increase of $209 million and $43 million in our Americas RAC and International RAC segments, respectively. DOE in our Americas RAC segment increased due primarily to higher personnel costs as well as fleet-related costs driven by increased travel demand and fleet age. Excluding an unfavorable $23 million fx impact, DOE in our International RAC segment increased $66 million due primarily to higher volume driven by increased travel demand.

Depreciation of revenue earning vehicles ~~which represent approximately 52%~~and lease charges, net decreased $10 million in the second quarter of 2022 compared to 2021 due primarily to a decrease of $20 million in our ~~total assets as~~Americas RAC segment, partly offset by an increase of ~~September 30, 2021. As a result of a semiconductor microchip manufacturing shortage and associated impacts~~$9 million in our International RAC segment. The decrease in our Americas RAC segment was due primarily to strength in residual values ~~changes~~and an increase in ~~these variables could cause a material change in our estimates regarding~~gains recognized on the disposition of vehicles. Excluding an unfavorable $5 million fx impact, depreciation ~~expense.~~

~~Recoverability of Goodwill and Indefinite-lived Intangible Assets~~

We test the recoverability of our goodwill and indefinite-lived intangible assets by performing an impairment analysis on an annual basis, as of October 1, and at interim periods when circumstances require as a result of a triggering event, as defined by Topic 350.

~~As of March 31, 2021, we quantitatively tested the recoverability of our goodwill and indefinite-lived intangible assets~~increased $15 million in our International RAC segment due in part to ~~continued adverse impacts~~increased fleet size resulting from COVID-19 and our reduction in cash flow projections. Based on the quantitative tests, no impairments were recorded in the first quarter of 2021. However, the fair value of certain tradenames, which are indefinite-lived intangible assets, were in excess by 6% of the carrying value of $540 million.

As of June 30, 2021, we determined that the projected revenues, expenses and cash flows, reflecting the expected duration and extent of impact to its business, customers, economy and the travel industry from COVID-19, and the impact of the Chapter 11 Cases, were materially consistent with the assumptions utilized in our March 31, 2021 quantitative impairment assessment. As a result of the foregoing considerations, along with the consideration of other indicators noted in Topic 350, we concluded there were no indicators of impairment triggered for our Americas RAC or International RAC segments in the second quarter of 2021.

As of September 30, 2021, we determined that the projected revenues, expenses and cash flows, reflecting the expected duration and extent of impact to our business, customers, economy and the travel industry from COVID-19 were materially consistent with the assumptions utilized in our March 31, 2021 quantitative impairment assessment. As a result of the foregoing considerations, along with the consideration of other indicators noted in Topic 350, we concluded there were no indicators of impairment triggered for the Americas RAC or International RAC segments in the third quarter of 2021.

Further deterioration in the general economic conditions in the travel industry, our cash flows and our ability to obtain future financing to maintain our fleet or the weighted average cost of capital assumptions may result in an impairment charge to earnings in future quarters. We will continue to closely monitor actual results versus our expectations, market events or conditions, including the impact of COVID-19 on our business and the travel industry, and the resulting impact to our assumptions about future estimated cash flows and the weighted average cost of capital. If our expectations of our operating results, both in magnitude or timing, do not materialize, or if our weighted average cost of capital increases, we may be required to record goodwill and indefinite-lived intangible asset impairment charges, which could be material.longer vehicle holding periods.

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HERTZ GLOBAL HOLDINGS, INC. AND SUBSIDIARIES

THE HERTZ CORPORATION AND SUBSIDIARIES

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED)

~~Subrogation Receivables~~SG&A increased $85 million in the second quarter of 2022 compared to 2021 due primarily to non-cash stock-based compensation costs and professional fees in our corporate operations, increased advertising spend in our Americas RAC and International RAC segments, partly offset by decreased bankruptcy-related charges in our corporation operations.

Vehicle interest expense, net decreased $53 million in the second quarter of 2022 compared to 2021 due primarily to lower average rates from the issuance of HVF III ABS Notes and the payoff and termination of HVF II debt in accordance with the Plan of Reorganization in 2021, as well as $21 million of gains on interest rate caps on the HVF III ABS Notes primarily in our Americas RAC segment.

Non-vehicle interest expense, net decreased $50 million in the second quarter of 2022 compared to 2021 due primarily to lower average interest rates partially offset by higher debt levels.

We had other income of $10 million in the second quarter of 2021 due in part to the gain on the sales of certain franchises in our Americas RAC segment.

In the second quarter of 2021, we incurred $469 million of net reorganization charges, primarily in our corporate operations, which was comprised primarily of professional fees associated with the Chapter 11 Cases, the loss on extinguishment of certain debt resulting from the implementation of the Plan of Reorganization, a prior plan sponsor breakup fee and other miscellaneous charges related to the implementation of the Plan of Reorganization.

For the three months ended June 30, 2022, we recorded a tax provision of $178 million which resulted in an effective tax rate of 27%. For the three months ended June 30, 2021, we recorded a tax benefit of $46 million, which resulted in an effective tax rate of 90%.

The ~~continued uncertainty of impacts from COVID-19 could result~~change in ~~a deterioration of~~tax in the ~~credit worthiness of~~three months ended June 30, 2022 compared to 2021 is driven by improvements in our ~~customers~~financial performance, as well as non-deductible bankruptcy costs incurred in 2021 and ~~third-parties regarding our subrogation receivables, and as a result we could incur material write-offs or a reduction~~tax benefits associated with the restructuring in ~~future collections.~~Europe recognized in 2021.

~~CONSOLIDATED RESULTS OF OPERATIONS – HERTZ~~

Three Months Ended
September 30, Percent Increase/(Decrease) Nine Months Ended
September 30, Percent Increase/(Decrease)
($ In millions) 2021 2020 2021 2020
Total revenues $ 2,226 $ 1,268 75% $ 5,387 $ 4,023 34%
Direct vehicle and operating expenses 1,131 779 45 2,855 2,624 9
Depreciation of revenue earning vehicles and lease charges 61 347 (83) 420 1,632 (74)
Non-vehicle depreciation and amortization 49 58 (15) 153 168 (9)
Selling, general and administrative expenses 177 138 29 498 506 (2)
Interest expense, net:
Vehicle 41 110 (62) 243 360 (32)
Non-vehicle 22 17 28 157 116 36
Interest expense, net 63 127 (50) 400 476 (16)
Technology-related intangible and other asset impairments — — — — 193 (100)
Write-off of intercompany loan — — — — 133 (100)
Other (income) expense, net (7) — NM (20) (15) 34
Reorganization items, net — 78 (100) 513 101 NM
(Gain) from the sale of a business — — — (400) — NM
Income (loss) before income taxes 752 (259) NM 968 (1,795) NM
Income tax (provision) benefit (156) 36 NM (189) 259 NM
Net income (loss) 596 (223) NM 779 (1,536) NM
Net (income) loss attributable to noncontrolling interests (3) 1 NM (1) 7 NM
Net income (loss) attributable to Hertz $ 593 $ (222) NM $ 778 $ (1,529) NM
Adjusted Corporate EBITDA(a)
$ 860 $ (26) NM $ 1,502 $ (855) NM

~~The footnote in the table above is shown in the "Footnotes to the Results of Operations and Selected Operating Data by Segment Tables" section of this MD&A.~~

~~NM - Not meaningful~~

~~Three Months Ended September~~Six months ended June 30, ~~2021~~2022 Compared with ~~Three Months Ended September~~Six months ended June 30, ~~2020~~2021

Total revenues increased ~~$957~~$993 million in the ~~third quarter~~first half of ~~2021~~2022 compared to ~~2020~~2021 due primarily to ~~increased travel demand resulting from the easing of government-imposed travel restrictions, where there was~~ an increase of ~~$1.0 billion~~$921 million and ~~$85~~$207 million in our Americas RAC and International RAC segments, ~~respectively.~~respectively, partially offset by a decrease of $136 million in All other operations. Excluding an unfavorable $3 million fx impact, revenues for our Americas RAC ~~revenues~~segment increased $924 million due primarily to higher volume and pricing. Excluding ~~a $6~~an unfavorable $58 million fx impact, revenues for our International RAC segment increased ~~$80~~$265 million resulting from higher pricing and volume. All other operations decreased due ~~primarily~~ to ~~higher pricing.~~the Donlen Sale in the first quarter of 2021.

DOE increased ~~$352~~$528 million in the ~~third quarter~~first half of ~~2021~~2022 compared to ~~2020~~2021 due primarily to an increase of ~~$339~~$471 million and ~~$19~~$69 million in our Americas RAC and International RAC segments, ~~respectively. DOE~~respectively, partially offset by a decrease of $8 million in our corporate operations. The increase in Americas RAC DOE was due primarily to higher personnel costs as well as fleet-related costs driven by increased travel demand and fleet age. Excluding an unfavorable $33 million fx impact DOE for International RAC increased $102 million due to higher volume driven by increased travel demand. The decrease in our corporate operations was due primarily to lower personnel costs.

Depreciation of revenue earning vehicles and lease charges decreased $312 million in the first half of 2022 compared to 2021 due to a decrease of $321 million in our Americas RAC segment, partly offset by an increase of $9 million in our International RAC segment. The decrease in our Americas RAC segment is due primarily to strength in residual values and an increase in gains recognized on the disposition of vehicles. Excluding an unfavorable $8 million impact of fx, depreciation of revenue earning vehicles and lease charges for our International RAC segment increased $17 million due primarily to increased fleet size due in part to longer vehicle holding periods resulting from new vehicle production constraints due to the Chip Shortage, partially offset by strength in residual values.

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HERTZ GLOBAL HOLDINGS, INC. AND SUBSIDIARIES

THE HERTZ CORPORATION AND SUBSIDIARIES

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED)

~~RAC segment~~SG&A increased $171 million in the first half of 2022 compared to 2021 due primarily to ~~higher volume driven by~~non-cash stock-based compensation costs and bankruptcy claims in our corporate operations, increased ~~travel demand. Excluding a $4 million fx impact, DOE~~advertising spend in our Americas RAC and International RAC segments and increased facility costs in our International RAC segment, increased $15 million due primarily to higher volume driven by the increased travel demand discussed above and higher personnel costs due in part to reductions in employee furloughs and associated government support across Europe.

Depreciation of revenue earning vehicles and lease charges decreased $286 million in the third quarter of 2021 compared to 2020 due primarily to a decrease of $165 million, $106 million and $16 million in our Americas RAC segment, all other operations and International RAC segment, respectively. The decrease in our Americas RAC segment was due primarily to the Chip Shortage affecting new vehicle production and strength in residual values, partially offset by ~~the acquisition of used vehicles. The decrease in all other operations was due to the sale of our Donlen business in the first quarter of 2021. The decrease~~lower personnel costs in our International ~~RAC segment is due primarily to the Chip Shortage affecting new vehicle production and strength in residual values.~~

Non-vehicle depreciation and amortization decreased $9 million in the third quarter of 2021 compared to 2020 due primarily to lower depreciation expense resulting in part from the Lease Rejection Orders in our Americas RAC segment.

~~SG&A increased $39 million in the third quarter of 2021 compared to 2020 due primarily to increased marketing spend primarily in our Americas~~ RAC segment.

Vehicle interest expense, net decreased ~~$69~~$152 million in the ~~third quarter~~first half of ~~2021~~2022 compared to ~~2020~~2021 due primarily to lower ~~debt levels and lower~~ average rates ~~resulting~~ from the issuance of HVF III ABS Notes and the payoff and termination of HVF II debt in accordance with the Plan of Reorganization in 2021, as well as $65 million of gains on interest rate caps on the HVF III ABS Notes primarily in our Americas RAC segment.

Non-vehicle interest expense, net ~~increased $5~~decreased $54 million in the ~~third quarter~~first half of ~~2021~~2022 compared to ~~2020~~2021 due primarily to ~~higher deferred costs and letter of credit fees and higher~~lower average interest rates ~~due to the suspension of interest on certain non-vehicle~~partially offset by higher debt ~~during the third quarter of 2020 resulting from the Chapter 11 Cases.~~levels.

We had other income of $7$13 million ~~for~~in the ~~third quarter~~first half of 2021 ~~which was~~ due ~~primarily~~in part to ~~income in our corporate operations from an equity-method investment and~~ the gain on the sales of certain franchises in our Americas RAC segment.

~~In the third quarter of 2020, we incurred $78 million of net reorganization charges in our corporate operations primarily for professional fees associated with the Chapter 11 Cases.~~

The effective tax rate was 21% and 14% in the third quarter of 2021 and 2020, respectively, and we recorded a tax provision of $156 million and a tax benefit of $36 million in the third quarter of 2021 and 2020, respectively. The increase in the effective tax rate and increase in tax provision were driven by improvements in our financial performance and changes in the mix of earnings and losses for jurisdictions for which no tax benefit can be recognized.

~~Nine months ended September 30, 2021 Compared with Nine months ended September 30, 2020~~

Total revenues increased $1.4 billion in the nine months ended September 30, 2021 compared to 2020 due primarily to an increase of $1.7 billion and $50 million in our Americas RAC and International RAC segments, respectively. Americas RAC revenues increased due primarily to increased pricing resulting from growth in travel demand and constraints on vehicles due to the Chip Shortage affecting new vehicle production. Excluding a $48 million fx impact, revenues for our International RAC segment were flat.

DOE increased $231 million in the nine months ended September 30, 2021 compared to 2020 due primarily to an increase of $282 million in our Americas RAC segment, partially offset by a decrease of $51 million in our International RAC segment. The increase in Americas RAC DOE was due primarily to higher volume, partially offset by lower fleet costs due to reduced fleet size and lower fixed costs resulting from cost-reduction initiatives.

~~Table of Contents~~

~~HERTZ GLOBAL HOLDINGS, INC. AND SUBSIDIARIES~~

~~THE HERTZ CORPORATION AND SUBSIDIARIES~~

~~ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED)~~

Excluding a $33 million fx impact DOE for International RAC decreased $84 million due to lower volume, lower personnel costs and lower fixed costs, partially offset by increases related to restructuring initiatives.

Depreciation of revenue earning vehicles and lease charges decreased $1.2 billion in the nine months ended September 30, 2021 compared to 2020 due to decreases of $767 million, $352 million and $94 million in our Americas RAC segment, all other operations and International RAC segment, respectively. The decrease in our Americas RAC segment is due primarily to a reduction in fleet size in connection with the Chapter 11 Cases and the Chip Shortage affecting new vehicle production. The decrease in all other operations was due to the sale of our Donlen business in the first quarter of 2021. Excluding a $7 million impact of fx, depreciation of revenue earning vehicles and lease charges for our International RAC segment decreased $101 million due primarily to the Chip Shortage affecting new vehicle production and strength in residual values.

Non-vehicle depreciation and amortization decreased $15 million in the nine months ended September 30, 2021 compared to 2020 due primarily to lower depreciation expense resulting in part from the Lease Rejection Orders in our Americas RAC segment.

SG&A decreased $8 million in the nine months ended September 30, 2021 compared to 2020 due to decreases of $38 million and $33 million in our Americas RAC and International RAC segments, respectively, partially offset by an increase of $65 million in our corporate operations. Americas RAC decreased due primarily to lower personnel costs due to cost-reduction initiatives, partially offset by higher marketing spend. Excluding a $7 million fx impact, SG&A in our International RAC segment decreased $40 million due primarily to lower professional fees resulting from debt restructuring initiatives, lower personnel costs due to employee furloughs and government support across Europe related to COVID-19, partially offset by increases related to restructuring initiatives. The increase in our corporate operations was due primarily to increased personnel costs and costs associated with contract cancellations.

~~Vehicle interest expense, net decreased $116 million in the nine months ended September 30, 2021 compared to 2020 due primarily to lower debt levels primarily in our Americas RAC segment.~~

Non-vehicle interest expense, net increased $41 million in the nine months ended September 30, 2021 compared to 2020 due primarily to higher deferred costs and letter of credit fees and higher average interest rates due primarily to the issuance of the Term Loans in the second quarter of 2021 and the DIP Credit Agreement which was entered into in the third quarter of 2020, partially offset by interest on certain non-vehicle debt being suspended as a result of filing the Chapter 11 Cases.

We had a $193 million impairment of technology-related intangible assets and capitalized cloud computing implementation costs in the nine months ended September 30, 2020 in our corporate operations due to uncertainty surrounding our financial ability to complete certain information technology projects as a result of COVID-19 and the filing of the Chapter 11 Cases.

We incurred a charge of $133 million in the nine months ended September 30, 2020 in our corporate operations resulting from the full write-off of the 2019 Master Loan with Hertz Holdings due to the filing of the Chapter 11 Cases.

We had other income of $20 million in the nine months ended September 30, 2021 compared to other income of $15 million in the nine months ended September 30, 2020. Other income in 2021 was due in part to the gain on the sales of certain franchises in our Americas RAC segment and income from an equity investment in our corporate operations. Other income in 2020 was comprised of a $20 million gain due to additional cash received from the sale of non-vehicle capital assets, which was completed in the fourth quarter of 2019, partially offset by $4 million in pension-related settlement charges.

We incurred $513 million of net reorganization charges in the ~~nine months ended September 30,~~first half of 2021, primarily in our corporate operations, which was comprised primarily of professional fees associated with the Chapter 11 Cases, the loss on extinguishment of certain debt resulting from the implementation of the Plan of Reorganization, a prior plan sponsor breakup fee and other miscellaneous charges related to the implementation of the Plan of

~~Table of Contents~~

~~HERTZ GLOBAL HOLDINGS, INC. AND SUBSIDIARIES~~

~~THE HERTZ CORPORATION AND SUBSIDIARIES~~

~~ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED)~~

Reorganization. ~~In the nine months ended September 30, 2020, we incurred $101 million of net reorganization charges primarily in our corporate operations for professional fees associated with the Chapter 11 Cases.~~

~~The effective tax rate was 20% and 14% in~~For the ~~nine months ended September 30, 2021 and 2020, respectively. We~~first half of 2022, we recorded a tax provision of ~~$189~~$308 million which resulted in an effective tax rate of 26%. For the first half of 2021, we recorded a tax provision of $33 million, which resulted in an effective tax rate of 15%.

The change in tax in the ~~nine months ended September 30, 2021~~first half of 2022 compared to ~~a tax benefit of $259 million in the nine months ended September 30, 2020. The increase in the tax provision in~~ 2021 ~~compared to 2020~~ is driven by improvements in our financial performance, as well as non-deductible bankruptcy costs incurred in the first half of 2021 and tax benefits associated with the restructuring in Europe recognized in the first half of ~~the European restructuring, reduced by the non-deductible bankruptcy transaction costs and the absence of recording a valuation allowance on historical foreign deferred tax assets in 2020.~~2021.

CONSOLIDATED RESULTS OF OPERATIONS – HERTZ GLOBAL

The above discussion for Hertz also applies to Hertz Global.

Hertz Global had ~~$16~~$461 million and $511 million of income from the change in fair value of Public Warrants that was incremental to Hertz for the ~~three~~second quarter and ~~nine months ended September 30, 2021. Hertz Global also had $164 million~~first half of reorganization items, net for the nine months ended September 30, 2021 that was incremental to the amounts shown for Hertz, which represent certain effects from the implementation of the Plan of Reorganization.

~~For the nine months ended September 30, 2020, Hertz had $27 million of income tax benefit that was incremental to the amounts shown for Hertz Global due primarily to the master loan write-off~~2022, respectively, included in ~~Hertz's~~Hertz Global's unaudited condensed consolidated statements ~~of operations~~ in Part I, Item 1 of this Quarterly Report on Form 10-Q.

Hertz Global had $164 million of reorganization items, net for the second quarter and first half of 2021, respectively, that was incremental to the amounts shown for Hertz. These amounts represent certain effects from the implementation of the Plan of Reorganization included in Hertz Global's unaudited condensed consolidated statements in Part I, Item 1 of this Quarterly Report on Form 10-Q.

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HERTZ GLOBAL HOLDINGS, INC. AND SUBSIDIARIES

THE HERTZ CORPORATION AND SUBSIDIARIES

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED)

RESULTS OF OPERATIONS AND SELECTED OPERATING DATA BY SEGMENT

Americas RAC


		Three Months Ended September 30,						Percent Increase/(Decrease)		Nine Months Ended September 30,											Percent Increase/(Decrease)		Three Months Ended June 30,									Percent Increase/(Decrease)		Six Months Ended June 30,						Percent Increase/(Decrease)
($ In millions, except as noted)	($ In millions, except as noted)	2021			2020				2021				2020					($ In millions, except as noted)		2022				2021					2022					2021
Total revenues	Total revenues	$	1,914		$	892			NM				$	4,524				$	2,857				58%			Total revenues	$	1,973			$		1,643	20%			$	3,531		$	2,610	35%
Depreciation of revenue earning vehicles and lease charges		$	24		$	188		(87)		$	314				$	1,080					(71)
Depreciation of revenue earning vehicles and lease charges, net																						Depreciation of revenue earning vehicles and lease charges, net	$	61				$	80			(24)		$	(32)		$	290		NM
Direct vehicle and operating expenses	Direct vehicle and operating expenses	$	960		$	622		55		$	2,394				$	2,113					13	Direct vehicle and operating expenses	$	1,002				$	793			26		$	1,905		$	1,434		33
Direct vehicle and operating expenses as a percentage of total revenues	Direct vehicle and operating expenses as a percentage of total revenues	50		%	70		%			53		%			74		%					Direct vehicle and operating expenses as a percentage of total revenues	51		%			48		%				54		%	55		%
Non-vehicle depreciation and amortization	Non-vehicle depreciation and amortization	$	42		$	47		(10)		$	130				$	136					(5)	Non-vehicle depreciation and amortization	$	30				$	43			(31)		$	56		$	87		(36)
Selling, general and administrative expenses	Selling, general and administrative expenses	$	72		$	46		56		$	191				$	229					(17)	Selling, general and administrative expenses	$	99				$	69			42		$	185		$	121		53
Selling, general and administrative expenses as a percentage of total revenues	Selling, general and administrative expenses as a percentage of total revenues	4		%	5		%			4		%			8		%					Selling, general and administrative expenses as a percentage of total revenues	5		%			4		%				5		%	5		%
Vehicle interest expense	Vehicle interest expense	$	33		$	79		(58)		$	182				$	265					(31)	Vehicle interest expense	$	35				$	77			(55)		$	37		$	149		(75)
Reorganization items, net	Reorganization items, net	$	—		$	1		(100)		$	80				$	1					NM	Reorganization items, net	$	—				$	94			(100)		$	—		$	80		(100)
Adjusted EBITDA	Adjusted EBITDA	$	830		$	(11)		NM		$	1,520				$	(701)					NM	Adjusted EBITDA	$	770				$	664			16		$	1,411		$	690		NM
Transaction Days (in thousands)(b)	Transaction Days (in thousands)(b)	27,627			18,579			49		72,870					64,262						13	Transaction Days (in thousands)(b)	29,160					24,992				17		54,739			45,243			21
Average Vehicles (in whole units)~~(c)~~(f)	Average Vehicles (in whole units)~~(c)~~(f)	387,368			389,605			(1)		346,032					480,700						(28)	Average Vehicles (in whole units)~~(c)~~(f)	422,113					350,122				21		409,867			325,364			26
Average Rentable Vehicles (in whole units)(c)																						Average Rentable Vehicles (in whole units)(c)	399,588					344,150				16		386,363			320,232			21
Vehicle Utilization(c)	Vehicle Utilization(c)	78		%	52		%			77		%			49		%					Vehicle Utilization(c)	80		%			80		%				78		%	78		%
Total RPD (in whole dollars)(d)		$	69.25		$	48.07		44		$	62.06				$	44.49					39
Total RPD (in dollars)(d)																						Total RPD (in dollars)(d)	$	67.67				$	65.70			3		$	64.50		$	57.67		12
Total RPU Per Month (in whole dollars)(e)	Total RPU Per Month (in whole dollars)(e)	$	1,646		$	764		NM		$	1,452				$	661					NM	Total RPU Per Month (in whole dollars)(e)	$	1,646				$	1,590			4		$	1,523		$	1,358		12
Depreciation Per Unit Per Month (in whole dollars)(f)	Depreciation Per Unit Per Month (in whole dollars)(f)	$	21		$	161		(87)		$	101				$	250					(60)	Depreciation Per Unit Per Month (in whole dollars)(f)	$	49				$	77			(36)		$	(13)		$	149		NM
Percentage of program vehicles as of period end	Percentage of program vehicles as of period end	5		%	4		%			5		%			4		%					Percentage of program vehicles as of period end	1		%			5		%				1		%	5		%

Footnotes to the table above are shown in the "Footnotes to the Results of Operations and Selected Operating Data by Segment Tables" section of this MD&A.

NM - Not meaningful

Three Months Ended ~~September~~June 30, ~~2021~~2022 Compared with Three Months Ended ~~September~~June 30, ~~2020~~2021

Total Americas RAC revenues increased ~~$1.0 billion~~$331 million in the ~~third~~second quarter of ~~2021~~2022 compared to ~~2020~~2021 due primarily to higher volume and pricing. Excluding an unfavorable $3 million fx impact, revenues increased $334 million. The increase in Transaction Days was driven by volume increases inacross most leisure ~~and most business~~ categories ~~as government-imposed~~due to increased travel ~~restrictions continued to be lifted.~~demand. The increase in Total RPD was due primarily to higher pricing across the industry ~~due to~~resulting from increased travel demand and industry-wide constraints on vehicles due to the Chip Shortage continuing to affect new vehicle production during the ~~third~~second quarter of ~~2021.~~2022. Airport revenues comprised 72% of total revenues for the segment in the ~~third~~second quarter of ~~2021 as~~2022 compared to ~~51% in~~71% the ~~third~~second quarter of ~~2020, due primarily to the lifting of air travel restrictions discussed above.~~2021.

Depreciation of revenue earning vehicles and lease charges, net for Americas RAC decreased ~~$165~~$20 million in the ~~third~~second quarter of ~~2021~~2022 compared to ~~2020. Average Vehicles were flat compared to 2020 due in part to the Chip Shortage affecting new vehicle production, partially offset by the acquisition of used vehicles.~~2021. Depreciation Per Unit Per Month decreased to ~~$21~~$49 in the ~~third~~second quarter of ~~2021~~2022 compared to ~~$161~~$77 in the ~~third~~second quarter of ~~2020~~2021 due primarily to strength in residual ~~values.~~

values and an increase in gains recognized on the disposition of vehicles. Average Vehicles increased in the second quarter of 2022 compared to 2021 due to increased travel demand.

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HERTZ GLOBAL HOLDINGS, INC. AND SUBSIDIARIES

THE HERTZ CORPORATION AND SUBSIDIARIES

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED)

DOE for Americas RAC increased ~~$339~~$209 million in the ~~third~~second quarter of ~~2021~~2022 compared to ~~2020~~2021 due primarily to higher ~~volume~~personnel costs as well as fleet-related costs driven by the increased travel demand discussed ~~above.~~

~~Non-vehicle depreciation~~above and ~~amortization decreased $5 million in the third quarter of 2021 compared to 2020 due primarily to lower depreciation expense resulting in part from the Lease Rejection Orders.~~fleet age.

SG&A for Americas RAC increased ~~$26~~$29 million in the ~~third~~second quarter of ~~2021~~2022 compared to ~~2020~~2021 due primarily to increased ~~marketing spend during our peak season in 2021.~~advertising spend.

Vehicle interest expense for Americas RAC decreased ~~$45~~$42 million in the ~~third~~second quarter of ~~2021~~2022 compared to ~~2020~~2021 due ~~primarily~~ to $20 million of net gains on interest rate caps on the HVF III ABS Notes and a decrease resulting from lower average rates resulting from the issuance of the HVF III ABS Notes and the full repayment and termination of the HVF II ABS Notes in accordance with the Plan of ~~Reorganization.~~Reorganization in 2021.

In the second quarter of 2021, Americas RAC incurred $94 million of net reorganization charges primarily related to the loss on extinguishment of certain vehicle debt resulting from the implementation of the Plan of Reorganization and certain contract-related charges.

~~Nine~~Six months ended ~~September~~June 30, ~~2021~~2022 Compared with ~~Nine~~Six months ended ~~September~~June 30, ~~2020~~2021

Total Americas RAC revenues increased ~~$1.7 billion~~$921 million in the ~~nine months ended September 30, 2021~~first half of 2022 compared to ~~the nine months ended September 30, 2020~~2021 due primarily to higher ~~pricing~~volume and ~~volume.~~pricing. Excluding ~~a $6~~an unfavorable $3 million fx impact, revenues increased ~~$1.7 billion.~~$924 million. The increase in Transaction Days was driven primarily by volume increases in most leisure categories as travel demand increased. The increase in Total RPD was driven primarily by higher pricing across the industry due to growth in travel demand and industry-wide constraints on vehicles due to the Chip Shortage affecting new vehicle production. The increase in Transaction Days was driven primarily by volume increases in most leisure and business categories as government-imposed travel restrictions began to lift in the second quarter of 2021 due to decreasing COVID-19 cases primarily across the U.S. Airport revenues comprised ~~70%~~72% of total revenues for the segment in the ~~nine months ended September 30, 2021~~first half of 2022 as compared to ~~56%~~68% in the ~~nine months ended September 30, 2020,~~first half of 2021, due primarily to the lifting of air travel ~~restrictions discussed above.~~restrictions.

Depreciation of revenue earning vehicles and lease charges for Americas RAC decreased ~~$767~~$321 million in the ~~nine months ended September 30, 2021~~first half of 2022 compared to the nine months ended September 30, 2020. Average Vehicles decreased due primarily to a reduction in fleet size in connection with our restructuring and the Chip Shortage affecting new vehicle production.2021. Depreciation Per Unit Per Month in the ~~nine months ended September 30, 2021 decreased~~first half of 2022 changed to ~~$101~~a negative expense of $13 compared to ~~$250~~an expense of $149 in the ~~nine months ended September 30, 2020,~~first half of 2021, due primarily to strength in residual ~~values.~~values and an increase in gains recognized on the disposition of vehicles. Average Vehicles increased due to increased travel demand.

DOE for Americas RAC increased ~~$282~~$471 million in the ~~nine months ended September 30, 2021~~first half of 2022 compared to ~~the nine months ended September 30, 2020. Excluding a $4 million fx impact, DOE increased $278 million~~2021 due primarily to higher ~~volume~~personnel costs as well as fleet-related costs driven by the increased travel demand discussed above ~~partially offset by lower~~and fleet ~~costs due to a reduced fleet size and lower facility costs resulting from cost-reduction initiatives.~~

Non-vehicle depreciation and amortization decreased $6 million in the nine months ended September 30, 2021 compared to 2020 due primarily to lower depreciation expense resulting in part from the Lease Rejection Orders.age.

SG&A for Americas RAC ~~decreased $38~~increased $64 million in the ~~nine months ended September 30, 2021~~first half of 2022 compared to the ~~nine months ended September 30, 2020,~~first half of 2021, due primarily to ~~lower personnel costs due to cost-reduction initiatives, partially offset by higher marketing spend during our peak season in 2021.~~increased advertising spend.

Vehicle interest expense for Americas RAC decreased ~~$83~~$111 million in the ~~nine months ended September 30, 2021~~first half of 2022 compared to ~~the nine months ended September 30, 2020,~~2021 due primarily to $60 million of gains on interest rate caps on the HVF III ABS Notes and lower debt levels resulting from vehicle dispositions associated with the Chapter 11 Cases and lower average rates resulting from the issuance of the HVF III ABS Notes and the full repayment and termination of the HVF II ABS Notes in accordance with the Plan of Reorganization.

~~Reorganization items, net for~~In the first half of 2021, Americas RAC ~~increased $79~~incurred $80 million ~~in the nine months ended September 30, 2021 compared to the nine months ended September 30, 2020 due~~of net reorganization charges primarily related to the loss on extinguishment of certain vehicle debt resulting from the implementation of the Plan of Reorganization and certain contract-related charges in the first half of 2021.

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HERTZ GLOBAL HOLDINGS, INC. AND SUBSIDIARIES

THE HERTZ CORPORATION AND SUBSIDIARIES

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED)

International RAC


		Three Months Ended September 30,						Percent Increase/(Decrease)		Nine Months Ended September 30,											Percent Increase/(Decrease)		Three Months Ended June 30,										Percent Increase/(Decrease)		Six Months Ended June 30,						Percent Increase/(Decrease)
($ in millions, except as noted)	($ in millions, except as noted)	2021			2020				2021				2020					($ in millions, except as noted)		2022				2021							2022				2021
Total revenues	Total revenues	$	312		$	227			38%				$	727				$	678				7%			Total revenues	$	371				$		230	61%			$	623		$	415	50%
Depreciation of revenue earning vehicles and lease charges		$	37		$	53		(30)		$	106				$	200					(47)
Depreciation of revenue earning vehicles and lease charges, net																						Depreciation of revenue earning vehicles and lease charges, net	$	45				$	36				26		$	79		$	69		14
Direct vehicle and operating expenses	Direct vehicle and operating expenses	$	173		$	155		12		$	452				$	503					(10)	Direct vehicle and operating expenses	$	197				$	154				28		$	348		$	279		25
Direct vehicle and operating expenses as a percentage of total revenues	Direct vehicle and operating expenses as a percentage of total revenues	56		%	68		%			62		%			74		%					Direct vehicle and operating expenses as a percentage of total revenues	53		%			67		%					56		%	67		%
Non-vehicle depreciation and amortization	Non-vehicle depreciation and amortization	$	3		$	5		(30)		$	12				$	14					(15)	Non-vehicle depreciation and amortization	$	4				$	4				9		$	7		$	9		(22)
Selling, general and administrative expenses	Selling, general and administrative expenses	$	27		$	54		(50)		$	97				$	130					(25)	Selling, general and administrative expenses	$	47				$	40				20		$	89		$	70		27
Selling, general and administrative expenses as a percentage of total revenues	Selling, general and administrative expenses as a percentage of total revenues	9		%	24		%			13		%			19		%					Selling, general and administrative expenses as a percentage of total revenues	13		%			17		%					14		%	17		%
Vehicle interest expense	Vehicle interest expense	$	8		$	19		(59)		$	49				$	61					(19)	Vehicle interest expense	$	10				$	21				(52)		$	13		$	41		(69)
Reorganization items, net	Reorganization items, net	$	—		$	—		—		$	12				$	—					NM	Reorganization items, net	$	—				$	12				(100)		$	—		$	12		(100)
Adjusted EBITDA	Adjusted EBITDA	$	78		$	(34)		NM		$	69				$	(184)					NM	Adjusted EBITDA	$	92				$	(1)				NM		$	119		$	(9)		NM
Transaction Days (in thousands)(b)	Transaction Days (in thousands)(b)	5,862			5,587			5		15,153					17,551						(14)	Transaction Days (in thousands)(b)	6,284					4,893					28		11,326			9,291			22
Average Vehicles (in whole units)~~(c)~~(f)	Average Vehicles (in whole units)~~(c)~~(f)	86,124			90,884			(5)		74,721					112,445						(34)	Average Vehicles (in whole units)~~(c)~~(f)	91,194					71,044					28		87,392			69,019			27
Average Rentable Vehicles (in whole units)(c)																						Average Rentable Vehicles (in whole units)(c)	90,648					69,807					30		86,508			67,478			28
Vehicle Utilization(c)	Vehicle Utilization(c)	74		%	67		%			74		%			57		%					Vehicle Utilization(c)	76		%			77		%					72		%	76		%
Total RPD (in whole dollars)(d)		$	54.81		$	42.58		29		$	48.68				$	42.12					16
Total RPD (in dollars)(d)																						Total RPD (in dollars)(d)	$	61.96				$	44.45				39		$	56.82		$	42.31		34
Total RPU Per Month (in whole dollars)(e)	Total RPU Per Month (in whole dollars)(e)	$	1,244		$	872		43		$	1,097				$	730					50	Total RPU Per Month (in whole dollars)(e)	$	1,432				$	1,039				38		$	1,240		$	971		28
Depreciation Per Unit Per Month (in whole dollars)(f)	Depreciation Per Unit Per Month (in whole dollars)(f)	$	147		$	205		(28)		$	161				$	217					(26)	Depreciation Per Unit Per Month (in whole dollars)(f)	$	172				$	160				7		$	156		$	158		(2)
Percentage of program vehicles as of period end	Percentage of program vehicles as of period end	39		%	34		%			39		%			34		%					Percentage of program vehicles as of period end	31		%			36		%					31		%	36		%

Footnotes to the table above are shown in the "Footnotes to the Results of Operations and Selected Operating Data by Segment Tables" section of this MD&A.

NM - Not meaningful

Three Months Ended ~~September~~June 30, ~~2021~~2022 Compared with Three Months Ended ~~September~~June 30, ~~2020~~2021

Total revenues for International RAC increased ~~$85~~$141 million in the ~~third~~second quarter of ~~2021~~2022 compared to ~~2020~~2021 due to higher pricing and volume. Excluding ~~a $6~~an unfavorable $41 million fx impact, revenues increased ~~$80~~$182 million due primarily to higher pricing across the industry ~~due to~~resulting from growth in travel demand ~~as government-imposed travel restrictions continued to be eased~~ and industry-wide constraints on vehicle supply due to the Chip Shortage affecting new vehicle production. The increase in Transaction Days was driven by higher volume primarily in Europe ~~as government-imposed travel restrictions were eased resulting in~~due to increased travel demand.

Depreciation of revenue earning vehicles and lease charges, net for International RAC ~~decreased $16~~increased $9 million in the ~~third~~second quarter of ~~2021~~2022 compared to ~~2020.~~2021. Excluding an unfavorable $5 million fx impact, depreciation increased $15 million. Average Vehicles for International RAC ~~decreased~~increased due ~~primarily~~in part to fleet purchasing constraints in 2021 and longer vehicle holding periods resulting from new vehicle production constraints due to the Chip ~~Shortage affecting new vehicle production.~~Shortage. Depreciation Per Unit Per Month for International RAC ~~decreased~~increased to ~~$147~~$172 for the ~~third~~second quarter of 2022 compared to $160 for the second quarter of 2021 ~~compared~~period due in part to ~~$205~~increase in ~~2020 due to the~~per unit costs of current year fleet, partly offset by strength in residual values.

DOE for International RAC increased $19 million in the third quarter of 2021 compared to 2020. Excluding a $4 million fx impact, DOE increased $15 million due primarily to higher volume driven by the increased travel demand discussed above and higher personnel costs due in part to reductions in employee furloughs and associated government support across Europe.

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THE HERTZ CORPORATION AND SUBSIDIARIES

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED)

DOE for International RAC increased $43 million in the second quarter of 2022 compared to 2021. Excluding an unfavorable $23 million fx impact, DOE increased $66 million due primarily to higher volume driven by the increased travel demand discussed above.

SG&A for International RAC ~~decreased $27~~increased $8 million in the ~~third~~second quarter of ~~2021~~2022 compared ~~to 2020~~2021. Excluding an unfavorable $5 million fx impact, SG&A increased $13 million due primarily to ~~lower professional fees resulting from debt restructuring initiatives in the third quarter of 2020 with no comparable charge in 2021.~~increased advertising spend.

Vehicle interest expense for International RAC decreased $11 million in the ~~third~~second quarter of ~~2021~~2022 compared to ~~2020~~2021 due primarily to lower debt levels ~~partially offset with higher average rates.~~and gains on interest rate caps.

In the second quarter of 2021, International RAC incurred $12 million of net reorganization charges primarily related to advisory fees related to debt refinancings and the loss on extinguishment of the European Vehicle Notes resulting from the implementation of the Plan of Reorganization.

~~Nine~~Six Months Ended ~~September~~June 30, ~~2021~~2022 Compared with ~~Nine~~Six Months Ended ~~September~~June 30, ~~2020~~2021

Total revenues for International RAC increased ~~$50~~$207 million in the ~~nine months ended September 30, 2021~~first half of 2022 compared to ~~the nine months ended September 30, 2020~~2021 due primarily to higher pricing ~~partially offset by lower~~and volume. Total RPD increased ~~16%~~34% driven primarily by higher pricing across the industry due to industry-wide constraints on vehicle supply due to the Chip Shortage affecting new vehicle production. Transaction Days ~~decreased 14%~~increased 22% driven primarily by ~~lower~~higher volume in most leisure and business categories due to ~~continued~~easing of government-imposed travel restrictions. Excluding ~~a $48~~an unfavorable $58 million fx impact, revenues ~~were flat.~~increased $265 million.

Depreciation of revenue earning vehicles and lease charges for International RAC ~~decreased $94~~increased $9 million in the ~~nine months ended September 30, 2021~~first half of 2022 compared to ~~the nine months ended September 30, 2020.~~2021. Excluding ~~a $7~~an unfavorable $8 million fx impact, depreciation ~~decreased $101~~increased $17 million. Average Vehicles for International RAC ~~decreased~~increased due in part to fleet purchasing constraints in 2021 and longer vehicle holding periods resulting from new vehicle production constraints due to ~~right sizing of the fleet and~~ the Chip ~~Shortage affecting new vehicle production.~~Shortage. Depreciation Per Unit Per Month for International RAC decreased to ~~$161~~$156 in the ~~nine months ended September 30, 2021~~first half of 2022 compared to ~~$217~~$158 in the ~~nine months ended September 30, 2020~~first half of 2021 due to strength in residual values.

DOE for International RAC ~~decreased $51~~increased $69 million in the ~~nine months ended September 30, 2021~~first half of 2022 compared to ~~the nine months ended September 30, 2020.~~2021. Excluding aan unfavorable $33 million fx impact, DOE ~~decreased $84~~increased $102 million due primarily to ~~lower~~higher volume driven by ~~the impact of~~increased travel restrictions resulting from COVID-19, lower facility costs resulting from cost-reduction initiatives and lower personnel costs due to government support across Europe related to COVID-19, partially offset by increases related to restructuring initiatives.demand.

SG&A for International RAC ~~decreased $33~~increased $19 million in the ~~nine months ended September 30, 2021~~first half of 2022 compared to ~~the nine months ended September 30, 2020.~~2021. Excluding ~~a $7~~an unfavorable $8 million fx impact, SG&A ~~decreased $40~~increased $27 million due primarily to ~~lower professional fees resulting from debt restructuring initiatives during the nine months ended September 30, 2020,~~increased facility costs and advertising spend, partially offset by lower personnel ~~costs due to employee furloughs and government support across Europe related to COVID-19.~~costs.

Vehicle interest expense for International RAC decreased ~~$12~~$28 million in the ~~nine months ended September 30, 2021~~first half of 2022 compared to ~~the nine months ended September 30, 2020~~2021 due primarily to lower debt levels ~~partially offset by higher average rates.~~and gains on interest rate caps.

~~Reorganization items, net for~~In the first half of 2021, International RAC ~~increased~~incurred $12 million ~~in the nine months ended September 30, 2021 compared to the nine months ended September 30, 2020 due~~of net reorganization charges primarily related primarily to advisory fees related to debt refinancings and the loss on extinguishment of the European Vehicle Notes resulting from the implementation of the Plan of Reorganization during the first half of 2021.

Footnotes to the Results of Operations and Selected Operating Data by Segment Tables

(a)Adjusted Corporate EBITDA is calculated as net income (loss) attributable to Hertz or Hertz Global, adjusted for income ~~taxes,~~taxes; non-vehicle depreciation and ~~amortization,~~amortization; non-vehicle debt interest, ~~net,~~net; vehicle debt-related ~~charges,~~charges; restructuring and restructuring related ~~charges,~~charges; information technology and finance transformation ~~costs,~~costs; reorganization items, ~~net,~~net; pre-reorganization items and non-debtor financing ~~charges,~~charges; gain from the sale of a ~~business~~business; unrealized (gains) losses from financial instruments and certain other miscellaneous items. When evaluating our operating performance, investors should not consider Adjusted Corporate EBITDA in isolation of, or as a substitute for, measures of our financial performance ~~determined in accordance with U.S. GAAP. The reconciliations to the most comparable consolidated U.S. GAAP measure are presented below:~~

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THE HERTZ CORPORATION AND SUBSIDIARIES

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED)

determined in accordance with U.S. GAAP. The reconciliations to the most comparable consolidated U.S. GAAP measure are presented below:

Hertz

Three Months Ended
September 30, Nine Months Ended
September 30,
(In millions) 2021 2020 2021 2020
Net income (loss) attributable to Hertz $ 593 $ (222) $ 778 $ (1,529)
Adjustments:
Income tax provision (benefit) 156 (36) 189 (259)
Non-vehicle depreciation and amortization 49 58 153 168
Non-vehicle debt interest, net(1)
22 17 157 116
Vehicle debt-related charges(2)
8 13 62 37
Restructuring and restructuring related charges(3)
22 7 72 54
Technology-related intangible and other asset impairment(4)
— — — 193
Write-off of intercompany loan(5)
— — — 133
Information technology and finance transformation costs(6)
4 8 13 34
Reorganization items, net(7)
— 78 513 101
Pre-reorganization and non-debtor financing charges(8)
1 44 41 89
Gain from the Donlen Sale(9)
— — (400) —
Other items(11)
5 7 (76) 8
Adjusted Corporate EBITDA $ 860 $ (26) $ 1,502 $ (855)



	Three Months Ended June 30,				Six Months Ended June 30,
(In millions)	2022		2021		2022		2021
Net income (loss) attributable to Hertz	$	480	$	(4)	$	856	$	185
Adjustments:
Income tax provision (benefit)	178		(46)		308		33
Non-vehicle depreciation and amortization	36		50		69		104
Non-vehicle debt interest, net(1)	41		91		80		135
Vehicle debt-related charges(2)	9		26		16		54

Restructuring and restructuring related charges(3)	15		37		21		50



Reorganization items, net(4)	—		469		—		513
Pre-reorganization and non-debtor financing charges(5)	—		17		—		40
Gain from the Donlen Sale(6)	—		(8)		—		(400)
Unrealized (gains) losses on financial instruments(7)	(21)		—		(65)		—
Other items(8)	26		7		93		(72)
Adjusted Corporate EBITDA	$	764	$	639	$	1,378	$	642

Hertz Global

Three Months Ended
September 30, Nine Months Ended
September 30,
(In millions) 2021 2020 2021 2020
Net income (loss) attributable to Hertz Global $ 605 $ (222) $ 626 $ (1,425)
Adjustments:
Income tax provision (benefit) 160 (36) 193 (232)
Non-vehicle depreciation and amortization 49 58 153 168
Non-vehicle debt interest, net(1)
22 17 157 118
Vehicle debt-related charges(2)
8 13 62 37
Restructuring and restructuring related charges(3)
22 7 72 54
Technology-related intangible and other asset impairment(4)
— — — 193
Information technology and finance transformation costs(6)
3 8 13 34
Reorganization items, net(7)
— 78 677 101
Pre-reorganization and non-debtor financing charges(8)
1 44 41 89
Gain from the Donlen Sale(9)
— — (400) —
Change in fair value of Public Warrants(10)
(16) — (16) —
Other items(11)
6 7 (76) 8
Adjusted Corporate EBITDA $ 860 $ (26) $ 1,502 $ (855)



	Three Months Ended June 30,				Six Months Ended June 30,
(In millions)	2022		2021		2022		2021
Net income (loss) attributable to Hertz Global	$	940	$	(168)	$	1,366	$	21
Adjustments:
Income tax provision (benefit)	179		(46)		309		33
Non-vehicle depreciation and amortization	36		50		69		104
Non-vehicle debt interest, net(1)	41		91		80		135
Vehicle debt-related charges(2)	9		26		16		54
Restructuring and restructuring related charges(3)	15		37		21		50


Reorganization items, net(4)	—		633		—		677
Pre-reorganization and non-debtor financing charges(5)	—		17		—		40
Gain from the Donlen Sale(6)	—		(8)		—		(400)
Unrealized (gains) losses on financial instruments(7)	(21)		—		(65)		—
Change in fair value of Public Warrants(9)	(461)		—		(511)		—
Other items(8)	26		7		93		(72)
Adjusted Corporate EBITDA	$	764	$	639	$	1,378	$	642

(1)In 2021, includes $8 million of loss on extinguishment of debt associated with the payoff and termination of the HIL Credit Agreement ~~recorded in~~resulting from the ~~second quarter. See Note 6, "Debt," in Part I, Item 1~~implementation of ~~this Quarterly Report on Form 10-Q for further information.~~the Plan of Reorganization.

(2)Represents vehicle debt-related charges relating to the amortization of deferred financing costs and debt discounts and premiums.

(3)Represents charges incurred under restructuring actions as defined in U.S. GAAP. ~~See Note 8, "Restructuring," in Part I, Item 1 of this Quarterly Report on Form 10-Q for further information.~~ Also includes restructuring related charges such as incremental costs incurred directly supporting business transformation initiatives.

(4)Represents charges incurred associated with the filing of and the emergence from the Chapter 11 Cases, as disclosed in Note 15, "Reorganization Items, Net," in Part I, Item 1 of this Quarterly Report.

(5)Represents charges incurred prior to the filing of the Chapter 11 Cases which are comprised of preparation charges for the reorganization, such as professional fees. Also, includes certain non-debtor financing and professional fee charges.

(6)Represents the net gain from the sale of our Donlen business on March 30, 2021 as disclosed in Note 3, "Divestitures," in Part I, Item 1 of this Quarterly Report.

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HERTZ GLOBAL HOLDINGS, INC. AND SUBSIDIARIES

THE HERTZ CORPORATION AND SUBSIDIARIES

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED)

~~(4)~~(7)Represents ~~the impairment of technology-related intangible assets and capitalized cloud computing implementation costs, as disclosed in~~unrealized (gains) losses on derivative financial instruments. See Note ~~5, "Goodwill and Intangible Assets, Net,~~10, "Financial Instruments," in Part I, Item 1 of this Quarterly ~~Report on Form 10-Q.~~

~~(5)Represents the write-off of the 2019 Master Loan between Hertz and Hertz Holdings, as disclosed in Note 15, "Related Party Transactions," in Part I, Item 1 of this Quarterly Report on Form 10-Q.~~

~~(6)Represents costs associated with our information technology and finance transformation programs, both of which are multi-year initiatives to upgrade and modernize our systems and processes.~~

~~(7)~~Represents charges incurred associated with the filing of and the emergence from the Chapter 11 Cases, as discussed in Note 18, "Reorganization Items, Net," in Part I, Item 1 of this Quarterly Report on Form 10-Q.Report.

(8)Represents miscellaneous items. For 2022, primarily includes bankruptcy claims, certain professional fees and charges ~~incurred prior~~related to the ~~filing~~settlement of the Chapter 11 Cases, as disclosed in Note 1, "Background," in Part I, Item 1 of this Quarterly Report on Form 10-Q, which are comprised of preparation charges for the reorganization, such as professional fees. Also, includesbankruptcy claims and certain ~~non-debtor financing and professional fee charges.~~

~~(9)Represents the net gain from the sale of our Donlen business on March 30, 2021 as disclosed in Note 3, "Divestitures," in Part I, Item 1 of this Quarterly Report on Form 10-Q.~~

~~(10)Represents the change in fair value during the reporting period for the Company's outstanding Public Warrants.~~

~~(11)Represents miscellaneous items, including~~ non-cash stock-based compensation ~~charges and amounts attributable to noncontrolling interests.~~charges. For 2021, ~~also~~ includes $100 million associated with the suspension of depreciation during the first quarter for the Donlen business while classified as held for sale, partially offset by letter of credit fees recorded in the first half of ~~2021~~the year and charges for a multiemployer pension plan withdrawal liability recorded in the first quarter. ~~For 2020, also includes charges of $18 million~~

(9)Represents the change in fair value during the reporting period for losses associated with certain vehicle damages, which were recorded in the second quarter, partially offset by a $20 million gain on the sale of non-vehicle capital assets, which was recorded in the first quarter.Hertz Global's outstanding Public Warrants.

(b)Transaction Days represents the total number of 24-hour periods, with any partial period counted as one Transaction Day, that vehicles were on rent (the period between when a rental contract is opened and closed) in a given period. Thus, it is possible for a vehicle to attain more than one Transaction Day in a 24-hour period.

(c)Average Rentable Vehicles ~~are~~excludes vehicles for sale on our retail lots or actively in the process of being sold through other disposition channels and determined using a simple average of ~~the number of~~such vehicles at the beginning and end of a given period. ~~Among other things, Average Vehicles is used to calculate~~Effective in the first quarter of 2022, as discussed above, we revised our calculation of Vehicle Utilization ~~which represents~~to use Average Rentable Vehicles in the ~~portion of our vehicles that are being utilized~~denominator. Accordingly, prior periods have been restated to ~~generate revenue.~~conform with the revised definition. Vehicle Utilization is calculated by dividing total Transaction Days by Available Car Days. ~~The calculation of Vehicle Utilization is shown in the table below:~~


		Americas RAC				International RAC					Americas RAC				International RAC
		Three Months Ended September 30,									Three Months Ended June 30,
		2021		2020		2021		2020			2022		2021		2022		2021
Transaction Days (in thousands)	Transaction Days (in thousands)	27,627		18,579		5,862		5,587		Transaction Days (in thousands)	29,160		24,992		6,284		4,893
Average Vehicles (in whole units)		387,368		389,605		86,124		90,884
Average Rentable Vehicles (in whole units)										Average Rentable Vehicles (in whole units)	399,588		344,150		90,648		69,807
Number of days in period (in whole units)	Number of days in period (in whole units)	92		92		92		92		Number of days in period (in whole units)	91		91		91		91
Available Car Days (in thousands)	Available Car Days (in thousands)	35,638		35,844		7,923		8,361		Available Car Days (in thousands)	36,366		31,319		8,248		6,352
Vehicle Utilization	Vehicle Utilization	78	%	52	%	74	%	67	%	Vehicle Utilization	80	%	80	%	76	%	77	%


	Americas RAC				International RAC
	Six Months Ended June 30,
	2022		2021		2022		2021
Transaction Days (in thousands)	54,739		45,243		11,326		9,291
Average Rentable Vehicles (in whole units)	386,363		320,232		86,508		67,478
Number of days in period (in whole units)	181		181		181		181
Available Car Days (in thousands)	69,952		58,000		15,664		12,216
Vehicle Utilization	78	%	78	%	72	%	76	%

Americas RAC International RAC
Nine Months Ended September 30,
2021 2020 2021 2020
Transaction Days (in thousands) 72,870 64,262 15,153 17,551
Average Vehicles (in whole units) 346,032 480,700 74,721 112,445
Number of days in period (in whole units) 273 274 273 274
Available Car Days (in thousands) 94,467 131,712 20,399 30,810
Vehicle Utilization 77 % 49 % 74 % 57 %

~~Table of Contents~~

~~HERTZ GLOBAL HOLDINGS, INC. AND SUBSIDIARIES~~

~~THE HERTZ CORPORATION AND SUBSIDIARIES~~

~~ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED)~~

(d)Total RPD is calculated as revenues with all periods adjusted to eliminate the effect of fluctuations in foreign currency exchange rates ("Total Revenues - adjusted for foreign currency"), divided by the total number of Transaction Days. As discussed above, effective ~~during~~in the ~~three months ended September 30,~~third quarter of 2021, we revised our calculation of Total RPD to include ancillary retail vehicle sales revenues, and accordingly, prior periods have been restated to conform with the revised definition. Our management believes eliminating the effect of fluctuations in foreign currency exchange rates is useful in analyzing underlying trends. The calculation of Total RPD is shown ~~below.~~below:


		Americas RAC				International RAC					Americas RAC				International RAC
		Three Months Ended September 30,									Three Months Ended June 30,
($ in millions, except as noted)	($ in millions, except as noted)	2021		2020		2021		2020		($ in millions, except as noted)	2022		2021		2022		2021
Revenues	Revenues	$	1,914	$	892	$	312	$	227	Revenues	$	1,973	$	1,643	$	371	$	230

Foreign currency adjustment(1)	Foreign currency adjustment(1)	(1)		1		9		11		Foreign currency adjustment(1)	—		(1)		18		(12)
Total Revenues - adjusted for foreign currency	Total Revenues - adjusted for foreign currency	$	1,913	$	893	$	321	$	238	Total Revenues - adjusted for foreign currency	$	1,973	$	1,642	$	389	$	218
Transaction Days (in thousands)	Transaction Days (in thousands)	27,627		18,579		5,862		5,587		Transaction Days (in thousands)	29,160		24,992		6,284		4,893
Total RPD (in whole dollars)		$	69.25	$	48.07	$	54.81	$	42.58
Total RPD (in dollars)										Total RPD (in dollars)	$	67.67	$	65.70	$	61.96	$	44.45

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HERTZ GLOBAL HOLDINGS, INC. AND SUBSIDIARIES

THE HERTZ CORPORATION AND SUBSIDIARIES

Americas RAC International RAC
Nine Months Ended September 30,
($ in millions, except as noted) 2021 2020 2021 2020
Revenues $ 4,524 $ 2,857 $ 727 $ 678
Foreign currency adjustment(1)
(2) 2 11 60
Total Revenues - adjusted for foreign currency $ 4,522 $ 2,859 $ 738 $ 738
Transaction Days (in thousands) 72,870 64,262 15,153 17,551
Total RPD (in whole dollars) $ 62.06 $ 44.49 $ 48.68 $ 42.12
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED)


	Americas RAC				International RAC
	Six Months Ended June 30,
($ in millions, except as noted)	2022		2021		2022		2021
Revenues	$	3,531	$	2,610	$	623	$	415

Foreign currency adjustment(1)	—		(1)		21		(22)
Total Revenues - adjusted for foreign currency	$	3,531	$	2,609	$	644	$	393
Transaction Days (in thousands)	54,739		45,243		11,326		9,291
Total RPD (in whole dollars)	$	64.50	$	57.67	$	56.82	$	42.31

(1)Based on December 31, ~~2020~~2021 foreign currency exchange rates for all periods presented.

(e) Total RPU Per Month is calculated as Total ~~Revenues-adjusted~~Revenues - adjusted for foreign currency divided by the Average Rentable Vehicles in each period and then divided by the number of months in the period reported. As discussed above, effective ~~during~~in the ~~three months ended September 30,~~third quarter 2021, we revised our calculation of Total RPU to include ancillary retail vehicle sales revenues and ~~accordingly,~~effective in the first quarter of 2022, we revised our calculation of Total RPU to use Average Rentable Vehicles as the denominator. Accordingly, prior periods have been restated to conform with the revised definition. ~~The calculation of Total RPU Per Month is shown below.~~


		Americas RAC				International RAC					Americas RAC				International RAC
		Three Months Ended September 30,									Three Months Ended June 30,
($ in millions, except as noted)	($ in millions, except as noted)	2021		2020		2021		2020		($ in millions, except as noted)	2022		2021		2022		2021
Total Revenues - adjusted for foreign currency	Total Revenues - adjusted for foreign currency	$	1,913	$	893	$	321	$	238	Total Revenues - adjusted for foreign currency	$	1,973	$	1,642	$	389	$	218
Average Vehicles (in whole units)		387,368		389,605		86,124		90,884
Average Rentable Vehicles (in whole units)										Average Rentable Vehicles (in whole units)	399,588		344,150		90,648		69,807
Total revenue per unit (in whole dollars)	Total revenue per unit (in whole dollars)	$	4,938	$	2,292	$	3,727	$	2,619	Total revenue per unit (in whole dollars)	$	4,938	$	4,771	$	4,295	$	3,116
Number of months in period (in whole units)	Number of months in period (in whole units)	3		3		3		3		Number of months in period (in whole units)	3		3		3		3
Total RPU Per Month (in whole dollars)	Total RPU Per Month (in whole dollars)	$	1,646	$	764	$	1,244	$	872	Total RPU Per Month (in whole dollars)	$	1,646	$	1,590	$	1,432	$	1,039


		Americas RAC				International RAC					Americas RAC				International RAC
		Nine Months Ended September 30,									Six Months Ended June 30,
($ in millions, except as noted)	($ in millions, except as noted)	2021		2020		2021		2020		($ in millions, except as noted)	2022		2021		2022		2021
Total Revenues - adjusted for foreign currency		$	4,522	$	2,859	$	738	$	738
Average Vehicles (in whole units)		346,032		480,700		74,721		112,445
Total Rental Revenues										Total Rental Revenues	$	3,531	$	2,609	$	644	$	393
Average Rentable Vehicles (in whole units)										Average Rentable Vehicles (in whole units)	386,363		320,232		86,508		67,478
Total revenue per unit (in whole dollars)	Total revenue per unit (in whole dollars)	$	13,068	$	5,948	$	9,877	$	6,563	Total revenue per unit (in whole dollars)	$	9,139	$	8,147	$	7,440	$	5,825
Number of months in period (in whole units)	Number of months in period (in whole units)	9		9		9		9		Number of months in period (in whole units)	6		6		6		6
Total RPU Per Month (in whole dollars)	Total RPU Per Month (in whole dollars)	$	1,452	$	661	$	1,097	$	730	Total RPU Per Month (in whole dollars)	$	1,523	$	1,358	$	1,240	$	971

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THE HERTZ CORPORATION AND SUBSIDIARIES

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED)

(f) Depreciation Per Unit Per Month represents the amount of average depreciation expense and lease charges, per vehicle per month and is calculated as depreciation of revenue earning vehicles and lease charges, net, with all periods adjusted to eliminate the effect of fluctuations in foreign currency exchange rates, divided by the Average Vehicles in each period, which is determined using a simple average of the number of vehicles at the beginning and end of a period, and then dividing by the number of months in the period reported. Our management believes eliminating the effect of fluctuations in foreign currency exchange rates is useful in analyzing underlying trends. The calculation of Depreciation Per Unit Per Month is shown below:


		Americas RAC				International RAC					Americas RAC				International RAC
		Three Months Ended September 30,									Three Months Ended June 30,
($ in millions, except as noted)	($ in millions, except as noted)	2021		2020		2021		2020		($ in millions, except as noted)	2022		2021		2022		2021
Depreciation of revenue earning vehicles and lease charges		$	24	$	188	$	37	$	53
Depreciation of revenue earning vehicles and lease charges, net										Depreciation of revenue earning vehicles and lease charges, net	$	61	$	80	$	45	$	36
Foreign currency adjustment(1)	Foreign currency adjustment(1)	—		—		1		3		Foreign currency adjustment(1)	—		1		3		(2)
Adjusted depreciation of revenue earning vehicles and lease charges	Adjusted depreciation of revenue earning vehicles and lease charges	$	24	$	188	$	38	$	56	Adjusted depreciation of revenue earning vehicles and lease charges	$	61	$	81	$	48	$	34
Average Vehicles (in whole units)	Average Vehicles (in whole units)	387,368		389,605		86,124		90,884		Average Vehicles (in whole units)	422,113		350,122		91,194		71,044
Adjusted depreciation of revenue earning vehicles and lease charges divided by Average Vehicles (in whole dollars)	Adjusted depreciation of revenue earning vehicles and lease charges divided by Average Vehicles (in whole dollars)	$	62	$	483	$	441	$	616	Adjusted depreciation of revenue earning vehicles and lease charges divided by Average Vehicles (in whole dollars)	$	145	$	231	$	526	$	480
Number of months in period (in whole units)	Number of months in period (in whole units)	3		3		3		3		Number of months in period (in whole units)	3		3		3		3
Depreciation Per Unit Per Month (in whole dollars)	Depreciation Per Unit Per Month (in whole dollars)	$	21	$	161	$	147	$	205	Depreciation Per Unit Per Month (in whole dollars)	$	49	$	77	$	172	$	160

Americas RAC International RAC
Nine Months Ended September 30,
($ in millions, except as noted) 2021 2020 2021 2020
Depreciation of revenue earning vehicles and lease charges $ 314 $ 1,080 $ 106 $ 200
Foreign currency adjustment(1)
— 1 2 20
Adjusted depreciation of revenue earning vehicles and lease charges $ 314 $ 1,081 $ 108 $ 220
Average Vehicles (in whole units)
346,032 480,700 74,721 112,445
Adjusted depreciation of revenue earning vehicles and lease charges divided by Average Vehicles (in whole dollars) $ 907 $ 2,249 $ 1,445 $ 1,957
Number of months in period (in whole units)
9 9 9 9
Depreciation Per Unit Per Month (in whole dollars) $ 101 $ 250 $ 161 $ 217


	Americas RAC				International RAC
	Six Months Ended June 30,
($ in millions, except as noted)	2022		2021		2022		2021
Depreciation of revenue earning vehicles and lease charges, net	$	(32)	$	290	$	79	$	69
Foreign currency adjustment(1)	—		1		3		(4)
Adjusted depreciation of revenue earning vehicles and lease charges	$	(32)	$	291	$	82	$	65
Average Vehicles (in whole units)	409,867		325,364		87,392		69,019
Adjusted depreciation of revenue earning vehicles and lease charges divided by Average Vehicles (in whole dollars)	$	(78)	$	894	$	934	$	948
Number of months in period (in whole units)	6		6		6		6
Depreciation Per Unit Per Month (in whole dollars)	$	(13)	$	149	$	156	$	158

(1)Based on December 31, ~~2020~~2021 foreign currency exchange rates for all periods presented.

LIQUIDITY AND CAPITAL RESOURCES

Our U.S. and international operations are funded by cash provided by operating activities and by extensive financing arrangements, both debt and equity, maintained by us in the U.S. and internationally.

Cash and Cash Equivalents

As of ~~September~~June 30, ~~2021,~~2022, we had ~~$2.7~~$1.0 billion of ~~unrestricted~~ cash and ~~unrestricted~~ cash equivalents and ~~$763~~$522 million of restricted cash and ~~restricted~~ cash equivalents. As of ~~September~~June 30, ~~2021, $426~~2022, $321 million of ~~unrestricted~~ cash and ~~unrestricted~~ cash equivalents and ~~$169~~$91 million of restricted cash and ~~restricted~~ cash equivalents were held by our subsidiaries outside of the U.S. ~~Beginning in the quarterly period ended March 31, 2020, we no longer~~We do not assert permanent reinvestment with respect to our non-U.S. earnings, and if not in the form of loan repayments or subject to favorable tax treaties, repatriation of some of these funds under current regulatory and tax law for use in domestic operations could expose us to additional cash taxes.

~~Voluntary Petitions~~We believe that cash and cash equivalents generated by our operations and cash received on the disposal of vehicles, together with amounts available under various liquidity facilities and refinancing options available to us in the capital markets, will be sufficient to fund our operating activities and obligations for ~~Bankruptcy and Emergence~~the next twelve months.

The COVID-19 pandemic spread across the globe, resulting in global economic slowdown and disruptions of travel and other industries, many of which negatively impacted our business and industry. In addition, COVID-19 resulted in our employees, contractors, suppliers, customers and other business partners being prevented from conducting normal business activities temporarily or for an indefinite period of time. This was largely caused by shutdowns that

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THE HERTZ CORPORATION AND SUBSIDIARIES

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED)

were initially requested or mandated by governmental authorities. Additionally, individuals voluntarily reduced travel in attempts to avoid the outbreak. In response, we began aggressive actions to eliminate costs. However, we faced significant ongoing expenses.

On May 22, 2020, the Debtors filed Petitions under Chapter 11 of the Bankruptcy Code in the Bankruptcy Court. The Chapter 11 Cases were jointly administered for procedural purposes only under the caption ~~In re: The Hertz Corporation, et al., Case No. 20-11218 (MFW)~~. Additional information about the Chapter 11 Cases, including access to documents filed with the Bankruptcy Court, is available online at https://restructuring.primeclerk.com/hertz, a website administered by Prime Clerk, a third party bankruptcy claims and noticing agent. The information on this website is not incorporated by reference and does not constitute part of this Quarterly Report on Form 10-Q.

The filing of the Chapter 11 Cases constituted defaults, termination events and/or amortization events with respect to certain of our existing debt obligations. As a result of the filing of the Chapter 11 Cases, the remaining capacity under all of our revolving credit facilities was terminated. Consequently, the sales proceeds from vehicles which serve as collateral for such vehicle finance facilities were applied to the payment of the related indebtedness of the Non-Debtor Financing Subsidiaries and were not otherwise available to fund our operations. Additionally, we were precluded from accessing any of our subordinated investment in the vehicle collateral until the related defaults are waived or the third-party funding under those facilities has been retired, either through the monetization of the underlying collateral or the refinancing of the related indebtedness.

As disclosed in Note 1, "Background," in Part I, Item 1 of this Quarterly Report on Form 10-Q, on May 14, 2021, the Debtors filed the Plan of Reorganization, and the solicitation version of the Supplement to the Disclosure Statement which was approved by the Bankruptcy Court on May 14, 2021. On June 10, 2021, the Plan of Reorganization was confirmed by the Bankruptcy Court. On June 30, 2021, the Effective Date, the Plan of Reorganization became effective in accordance with its terms and the Debtors emerged from Chapter 11.

~~On the Effective Date, as a result of the Plan of Reorganization, we received cash proceeds of $7.5 billion comprised of:~~

•~~$2.8 billion from the purchase of reorganized Hertz Global common stock by the Plan Sponsors and certain other investment funds and entities;~~

•~~$1.6 billion from the purchase of reorganized Hertz Global common stock pursuant to the Rights Offering;~~

•~~$1.5 billion (less a 2% upfront discount and stock issuance fees) from the purchase of preferred stock of reorganized Hertz Global by Apollo; and~~

•~~$1.5 billion in proceeds from our Term Loans.~~

~~Such cash proceeds were used, in part, to provide payments to our stakeholders pursuant to the terms of the Plan of Reorganization as follows:~~

•~~the holders of administrative, priority and secured claims received payment in cash in full;~~

•~~the holders of the approximately $1.0 billion of obligations owed with respect to the DIP Credit Agreement received payment in cash in full;~~

•~~the holders of the Senior Term Loan, Senior RCF and Letter of Credit Facility received payment in cash in full with respect to all non-contingent liquidated claims;~~

•~~the holders of claims with respect to the Senior Second Priority Secured Notes received payment in cash in full;~~

•~~the holders of the €725 million European Vehicle Notes received payment in cash in full;~~

•~~the holders of the €257 million Second HIL Credit Agreement received payment in cash in full;~~

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~~HERTZ GLOBAL HOLDINGS, INC. AND SUBSIDIARIES~~

~~THE HERTZ CORPORATION AND SUBSIDIARIES~~

~~ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED)~~

~~Petition Date), subject to the rights of creditors (if any) to bring a claim for the payment of additional interest and/or premiums; and~~

•the holders of general unsecured claims will receive payment in cash in full plus interest at the federal judgment rate (at such rate in effect as of the Petition Date), subject to the rights of creditors to bring a claim for payment of additional interest.

On the Effective Date, in accordance with the Plan of Reorganization, reorganized Hertz entered into the First Lien Credit Agreement that provides for an aggregate amount of $2.8 billion comprised of the First Lien RCF in an aggregate committed amount of $1.3 billion plus Term Loans in an aggregate principal amount of $1.5 billion. Additionally, reorganized Hertz entered into a HVF III ABS facility program with an aggregate principal amount of $6.8 billion comprised of variable funding notes with a principal amount up to $2.8 billion and medium term notes in an aggregate principal amount of $4.0 billion. On the Effective Date, substantially all existing non-vehicle debt and all existing ABS facilities under the HVF II U.S. ABS Program were repaid in full and terminated. See Note 6, "Debt," in Part I, Item 1 of this Quarterly Report on Form 10-Q for additional information.

We believe that unrestricted cash and unrestricted cash equivalents generated by our operations and cash received on the disposal of vehicles, together with amounts available under various liquidity facilities and refinancing options available to us in the capital markets, will be sufficient to fund operating requirements for the next twelve months.

Cash Flows - Hertz

As of ~~September~~June 30, ~~2021~~2022 and December 31, ~~2020,~~2021, Hertz had ~~unrestricted~~ cash and ~~unrestricted~~ cash equivalents of ~~$2.7~~$1.0 billion and ~~$1.1~~$2.3 billion, respectively, and restricted cash and ~~restricted~~ cash equivalents of ~~$763~~$522 million and ~~$383~~$393 million, respectively. The following table summarizes the net change in cash and cash equivalents and restricted cash and ~~restricted~~ cash equivalents for the periods shown:


		Nine Months Ended September 30,							Six Months Ended June 30,
(In millions)	(In millions)	2021		2020		$ Change		(In millions)	2022		2021		$ Change
Cash provided by (used in):	Cash provided by (used in):							Cash provided by (used in):
Operating activities	Operating activities	$	1,208	$	931	$	277	Operating activities	$	1,330	$	465	$	865
Investing activities	Investing activities	(2,440)		3,622		(6,062)		Investing activities	(3,251)		(2,316)		(935)
Financing activities	Financing activities	3,170		(4,077)		7,247		Financing activities	859		3,004		(2,145)
Effect of exchange rate changes	Effect of exchange rate changes	(22)		18		(40)		Effect of exchange rate changes	(25)		(8)		(17)
Net change in cash, cash equivalents, restricted cash and restricted cash equivalents		$	1,916	$	494	$	1,422
Net change in cash and cash equivalents and restricted cash and cash equivalents								Net change in cash and cash equivalents and restricted cash and cash equivalents	$	(1,087)	$	1,145	$	(2,232)

During the ~~nine months ended September 30, 2021,~~first half of 2022, cash flows from operating activities increased by ~~$277~~$865 million period over period due primarily to a ~~$928~~$758 million change in net income attributable to Hertz, as adjusted for non-cash and non-operating items, ~~partially offset by~~and a ~~$651~~$107 million ~~reduction~~change in working capital ~~requirements.~~accounts. Cash flows from working capital accounts ~~decreased~~increased due primarily to ~~$485 million cash paid for~~the reduction of reorganization items and professional fees and the elimination of certain expense prepayment requirements while in Chapter 11, partially offset by the ~~nine months ended September 30, 2021 compared~~payment of bankruptcy claims in 2022 that had been previously deferred and subject to ~~$35 million cash paid~~compromise while in ~~the~~Chapter 11 in ~~the 2020 period.~~2021.

Our primary investing activities relate to the acquisition and disposal of revenue earning vehicles. During the ~~nine months ended September 30, 2021,~~first half of 2022, there was a ~~$6.1 billion decrease~~$935 million increase in the cash ~~provided by~~used in investing activities period over period due primarily to ~~a $6.8 billion net decrease in cash proceeds from disposal~~$818 million of ~~revenue earning vehicles resulting from longer vehicle holding periods due to the Chip Shortage affecting new vehicle production. The net decrease in cash provided was partially offset by $871 million~~ net proceeds received from the Donlen ~~Sale.~~Sale in 2021 with no comparable in the 2022 period and a $265 million net increase in cash expenditures primarily resulting from the acquisition of vehicles to meet increased travel demand, partially offset by $208 million related to cash collateral payments, net of returns, for certain outstanding letters of credit upon emergence from bankruptcy in 2021.

Net financing cash inflows were ~~$3.2~~$859 million in the first half of 2022 compared to cash inflows of $3.0 billion in the ~~nine months ended September 30,~~ 2021 ~~compared to cash outflows of $4.1~~period. The $2.1 billion ~~in the 2020 period due primarily to $5.6 billion in contributions from Hertz Holdings from net proceeds received from the issuance of reorganized Hertz Global equity. The change~~decrease in cash inflows was due in part to a $5.6 billion contribution from Hertz Holdings in 2021 with no comparable in 2022, $1.6 billion of dividends paid to Hertz Holdings to fund share repurchases in 2022, partially offset by ~~$1.8~~$4.9 billion of net ~~outflows~~proceeds primarily related to ~~the extinguishment of debt, partially offset by~~ the issuance of new vehicle debt in ~~accordance with the Plan of Reorganization.~~2022.

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THE HERTZ CORPORATION AND SUBSIDIARIES

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED)

Cash Flows - Hertz Global

As of ~~September~~June 30, ~~2021~~2022 and December 31, ~~2020,~~2021, Hertz Global had ~~unrestricted~~ cash and ~~unrestricted~~ cash equivalents of ~~$2.7~~$1.0 billion and ~~$1.1~~$2.3 billion, respectively, and restricted cash and ~~restricted~~ cash equivalents of ~~$763~~$522 million and ~~$411~~$393 million, respectively. The following table summarizes the net change in cash and cash equivalents and restricted cash and ~~restricted~~ cash equivalents for the periods shown:


		Nine Months Ended September 30,							Six Months Ended June 30,
(In millions)	(In millions)	2021		2020		$ Change		(In millions)	2022		2021		$ Change
Cash provided by (used in):	Cash provided by (used in):							Cash provided by (used in):
Operating activities	Operating activities	$	1,208	$	928	$	280	Operating activities	$	1,329	$	465	$	864
Investing activities	Investing activities	(2,440)		3,622		(6,062)		Investing activities	(3,251)		(2,316)		(935)
Financing activities	Financing activities	3,142		(4,046)		7,188		Financing activities	859		2,976		(2,117)
Effect of exchange rate changes	Effect of exchange rate changes	(22)		18		(40)		Effect of exchange rate changes	(25)		(8)		(17)
Net change in cash, cash equivalents, restricted cash and restricted cash equivalents		$	1,888	$	522	$	1,366
Net change in cash and cash equivalents and restricted cash and cash equivalents								Net change in cash and cash equivalents and restricted cash and cash equivalents	$	(1,088)	$	1,117	$	(2,205)

Fluctuations in operating, investing and financing cash flows from period to period ~~are~~were due to the same factors as those ~~discussed~~disclosed for Hertz above, with the exception of ~~any~~ cash inflows or outflows related to the ~~master loan agreement between~~repurchase of our common stock and the exercise of Public Warrants as disclosed in Note 8, "Public Warrants, Equity and Earnings (Loss) Per Common Share – Hertz ~~and Hertz~~ Global, ~~and any contributions by Hertz Global.~~" in Part I, Item 1 of this Quarterly Report.

Equity Financing

Share Repurchase Programs for Common Stock

In November 2021, Hertz Global's Board of Directors approved the 2021 Share Repurchase Program that authorized the repurchase of up to $2.0 billion worth of shares of Hertz Global's outstanding common stock. Between January 1, 2022 and June 30, 2022, a total of 80,677,021 shares of Hertz Global's common stock were repurchased at an average share price of $19.74 for an aggregate purchase price of $1.6 billion. During the second quarter of 2022, the Company completed the 2021 Share Repurchase Program. A total of 97,783,047 shares of Hertz Global common stock were repurchased since the inception of this program for an aggregate purchase price of $2.0 billion. These amounts are included in treasury stock in the accompanying Hertz Global unaudited condensed consolidated balance sheet as of June 30, 2022.

In June 2022, Hertz Global's Board of Directors approved the 2022 Share Repurchase Program that authorized additional repurchases of up to an incremental $2.0 billion worth of shares of Hertz Global's outstanding common stock. In June 2022, a total of 1,207,930 shares of Hertz Global's common stock were repurchased under this program at an average share price of $16.56 for an aggregate purchase price of $20 million. These amounts are included in treasury stock in the accompanying Hertz Global unaudited condensed consolidated balance sheet as of June 30, 2022.

Hertz Global funded the share repurchases with available cash and dividend distributions from Hertz.

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HERTZ GLOBAL HOLDINGS, INC. AND SUBSIDIARIES

THE HERTZ CORPORATION AND SUBSIDIARIES

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED)

Debt Financing

Vehicle Debt Financing

In January 2022, HVF III Series 2022-1 Notes were issued in an aggregate principal amount of $750 million. Hertz purchased the Class D Notes, and as a result approximately $98 million of the aggregate principal amount is eliminated in consolidation. In July 2022, $81 million of the Series 2022-1 Class D Notes were sold to a third party.

In January 2022, HVF III Series 2022-2 Notes were issued in an aggregate principal amount of $750 million. Hertz purchased the Class D Notes, and as a result approximately $98 million of the aggregate principal amount is eliminated in consolidation.

In January 2022, the Australian Securitization was amended to increase the aggregate maximum borrowings to AUD250 million and to extend the maturity to April 2024.

In March 2022, HVF III Series 2022-3 Notes were issued in an aggregate principal amount of $383 million. Hertz purchased the Class D Notes, and as a result approximately $50 million of the aggregate principal amount is eliminated in consolidation. In July 2022, all of the Series 2022-3 Class D Notes were sold to a third party.

In March 2022, HVF III Series 2022-4 Notes were issued in an aggregate principal amount of $667 million. Hertz purchased the Class D Notes, and as a result approximately $87 million of the aggregate principal amount is eliminated in consolidation.

In March 2022, HVF III Series 2022-5 Notes were issued in an aggregate principal amount of $364 million. Hertz purchased the Class D Notes, and as a result approximately $47 million of the aggregate principal amount is eliminated in consolidation.

In March 2022, an increase to the commitments for the Series 2021-A Notes was made, increasing the maximum principal amount that may be outstanding from $3.0 billion to $3.2 billion.

In March 2022, Hertz U.K. Limited amended the U.K. Toyota Financing Facility to increase aggregate maximum borrowings from £10 million to £25 million and extended the maturity to October 2022.

In April 2022, Hertz New Zealand Holdings Limited, an indirect, wholly-owned subsidiary of Hertz, amended its credit agreement to extend the maturity to June 2024.

In April 2022, Hertz U.K. Limited amended the U.K. Financing Facility to provide for aggregate maximum borrowings of up to £120 million, for a seasonal commitment period through October 2022. Following the expiration of the seasonal commitment period, aggregate maximum borrowings will revert to £100 million. Additionally, the U.K. Financing Facility was amended to extend the maturity of the aggregate maximum borrowings of £100 million to October 2023.

In May 2022, an increase to the commitments for the Series 2021-A Notes was made, increasing the maximum principal amount that may be outstanding from $3.2 billion to $3.6 billion. In June 2022, an increase to the commitments for the Series 2021-A Notes was made, increasing the maximum principal amount that may be outstanding from $3.6 billion to $3.8 billion. Additionally, the maturity date of the Series 2021-A Notes Class A Notes was extended to June 2024.

In June 2022, Hertz entered into the Repurchase Facility, whereby Hertz may sell the HVF III Series 2022 Class D Notes to the Repurchase Facility counterparty and repurchase such notes from time to time. Transactions occurring under the Repurchase Facility are based on mutually agreeable terms and prevailing rates. As of June 30, 2022, transactions totaling $236 million were outstanding under the Repurchase Facility and such transactions bear interest at a rate of SOFR plus 150 basis points and have a 30-day tenor.

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HERTZ GLOBAL HOLDINGS, INC. AND SUBSIDIARIES

THE HERTZ CORPORATION AND SUBSIDIARIES

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED)

In June 2022, the Hertz Canadian Securitization was amended to provide for aggregate maximum borrowings of CAD$450 million, for a seasonal commitment period through November 2022. Following the expiration of the seasonal commitment period, aggregate maximum borrowings will revert to CAD$350 million. Additionally, the Hertz Canadian Securitization was amended to extend the maturity of the aggregate maximum borrowings of CAD$350 million to June 2024.

In July 2022, an increase to the commitments for the Series 2021-A Notes was made, increasing the maximum principal amount that may be outstanding from $3.8 billion to $3.9 billion.

Non-vehicle Debt Financing

In March 2022, Hertz increased the aggregate committed amount of the First Lien RCF from $1.3 billion to $1.5 billion and the sublimit for letters of credit from $1.1 billion to $1.4 billion and amended the First Lien RCF to change the benchmark from USD LIBOR to the SOFR based rate. In May 2022, Hertz increased the aggregate committed amount of the First Lien RCF from $1.5 billion to $1.7 billion and the sublimit for letters of credit from $1.4 billion to $1.6 billion. In June 2022, Hertz increased the aggregate committed amount of the First Lien RCF from $1.7 billion to $1.9 billion and the sublimit for letters of credit from $1.6 billion to $1.8 billion.

Substantially all of our revenue earning vehicles and certain related assets are owned by special purpose entities or are encumbered in favor of the lenders under the various credit facilities, other secured financings and asset-backed securities programs. None of the value of such assets (including the assets owned by Hertz Vehicle Financing III LLC and various international subsidiaries that facilitate ~~the Company's~~our international securitizations) will be available to satisfy the claims of unsecured creditors unless the secured creditors are paid in full.

Refer to Note 6,5, "Debt," in Part I, Item 1 of this Quarterly Report ~~on Form 10-Q~~ for information on our outstanding debt obligations and our borrowing capacity and availability under our revolving credit facilities as of ~~September~~June 30, ~~2021.~~2022. Cash paid for interest on vehicle debt during the ~~nine months ended September 30,~~first half of 2022 and 2021 was ~~$181~~$92 million and $203 million, respectively. The $111 million decrease in cash paid for vehicle debt interest is due primarily to the payoff and termination of vehicle debt in accordance with the Plan of Reorganization in 2021 and lower average rates from the issuance of HVF III ABS Notes. Cash paid for interest on non-vehicle debt ~~and $227 million for interest on vehicle debt. Cash paid for interest~~ during the ~~nine months ended September 30, 2020~~first half of 2022 and 2021 was ~~$78~~$74 million ~~for interest on non-vehicle debt~~ and ~~$275~~$158 million, ~~for interest on vehicle debt.~~respectively. The ~~$103~~$84 million ~~increase~~decrease in cash paid for non-vehicle debt interest is due primarily to the payoff and termination of non-vehicle ~~interest previously classified as liabilities subject to compromise that was paid upon emergence from Chapter 11 on~~debt in accordance with the ~~Effective Date.~~Plan of Reorganization in 2021.

Our available corporate liquidity, which excludes unused commitments under our vehicle debt, was as follows:


(In millions)	(In millions)	September 30, 2021		December 31, 2020		(In millions)	June 30, 2022		December 31, 2021
Unrestricted Cash and unrestricted cash equivalents		$	2,703	$	1,096
Cash and cash equivalents						Cash and cash equivalents	$	1,041	$	2,257
Availability under the First Lien RCF	Availability under the First Lien RCF	1,144		—		Availability under the First Lien RCF	1,449		925
Corporate liquidity	Corporate liquidity	$	3,847	$	1,096	Corporate liquidity	$	2,490	$	3,182

Letters of Credit

As of June 30, 2022, there were outstanding standby letters of credit totaling $701 million comprised primarily of $245 million issued under the Term C Loan and $441 million issued under the First Lien RCF. As of June 30, 2022, no capacity remains to issue letters of credit under the Term C Loan. Such letters of credit have been issued primarily to support our insurance programs and to provide credit enhancement for our asset-backed securitization facilities, as well as to support our vehicle rental concessions and leaseholds. As of June 30, 2022, none of the issued letters of credit have been drawn upon.

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HERTZ GLOBAL HOLDINGS, INC. AND SUBSIDIARIES

THE HERTZ CORPORATION AND SUBSIDIARIES

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED)

~~Preferred Stock Dividends~~

Shares of our Series A Preferred Stock accrue dividends payable semi-annually in arrears at a rate of 9% per annum prior to June 30, 2023 and generally increasing thereafter, where the first dividend payment is payable on the six-month anniversary of the Effective Date. Dividends may be paid in cash or in kind for the first 42 months after the issuance date, at our option. If not paid in cash when due, our future dividend obligations will compound. Pursuant to the certificate of designations for the Series A Preferred Stock, we may redeem the Series A Preferred Stock in whole or in part at any time and from time to time, in cash, at a redemption price equal to the then-current accrued stated value of the Series A Preferred Stock being redeemed, subject to a multiple of invested capital floor price equal to 1.30 times the $1,000 per share liquidation preference. However, as per the terms of the First Lien Credit Agreement, we are precluded from making cash payments, including dividends, to the preferred shareholders prior to June 30, 2023. As of September 30, 2021, we had $34 million of accumulated undeclared dividends for outstanding Series A Preferred Stock which are calculated on the basis of a 365 day year.

Covenants

The First Lien Credit Agreement requires us to comply with the following financial covenants: (i) until the expiration of the Relief Period, as defined in the First Lien Credit Agreement, a minimum liquidity of $500 million in the first and last quarters of the calendar year and $400 million in the second and third quarters of the calendar year; and (ii) subsequent to the expiration of the Relief Period,covenant: a First Lien Ratio of less than or equal to 3.00 to 1.00 in the first and last quarters of the calendar year and 3.50 to 1.00 in the second and third quarters of the calendar year. ~~Both of the~~This financial ~~covenants disclosed above are~~covenant was effective beginning in the third quarter of 2021. As of ~~September~~June 30, ~~2021,~~2022, we were in compliance with the First Lien Ratio.

In addition to the financial ~~covenants,~~covenant, the First Lien Credit Agreement contains customary affirmative covenants including, among other things, the delivery of quarterly and annual financial statements and compliance certificates, and covenants related to conduct of business, maintenance of property and insurance, compliance with environmental laws and the granting of security interest for the benefit of the secured parties under that agreement on after-acquired real property, fixtures and future subsidiaries. The First Lien Credit Agreement also contains customary negative covenants, including, among other things, the incurrence of liens, indebtedness, asset dispositions and restricted payments. As of ~~September~~June 30, ~~2021,~~2022, we were in compliance with all covenants in the First Lien Credit Agreement.

Capital Expenditures

Revenue Earning Vehicles Expenditures and Disposals

The table below sets forth our revenue earning vehicles expenditures and related disposal proceeds for the periods shown:


Cash inflow (cash outflow)	Cash inflow (cash outflow)	Revenue Earning Vehicles						Cash inflow (cash outflow)	Revenue Earning Vehicles
(In millions)	(In millions)	Capital Expenditures		Disposal Proceeds		Net Capital Expenditures		(In millions)	Capital Expenditures		Disposal Proceeds		Net Capital Expenditures
2022								2022
First Quarter								First Quarter	$	(2,985)	$	1,471	$	(1,514)
Second Quarter								Second Quarter	(3,104)		1,416		(1,688)

Total								Total	$	(6,089)	$	2,887	$	(3,202)
2021	2021							2021
First Quarter	First Quarter	$	(1,517)	$	686	$	(831)	First Quarter	$	(1,517)	$	686	$	(831)
Second Quarter	Second Quarter	(2,619)		513		(2,106)		Second Quarter	(2,619)		513		(2,106)
Third Quarter		(1,060)		746		(314)

Total	Total	$	(5,196)	$	1,945	$	(3,251)	Total	$	(4,136)	$	1,199	$	(2,937)
2020
First Quarter		$	(4,346)	$	2,212	$	(2,134)
Second Quarter		(610)		2,793		2,183
Third Quarter		(232)		3,765		3,533

Total		$	(5,188)	$	8,770	$	3,582

The table below sets forth expenditures for revenue earning vehicles, net of disposal proceeds:



Cash inflow (cash outflow)	Six Months Ended June 30,
($ in millions)	2022		2021		$ Change		% Change
Americas RAC	$	(2,787)	$	(2,471)	$	(316)	13
International RAC	(415)		(382)		(33)		9
All other operations(1)	—		(84)		84		(100)
Total	$	(3,202)	$	(2,937)	$	(265)	9

(1) Substantially comprised of our Donlen business, which was sold on March 30, 2021 as disclosed in Note 3, "Divestitures," in Part I, Item 1 of this Quarterly Report.

Revenue earning vehicle expenditures increased approximately $2.0 billion, or 47%, in the first half of 2022 compared to the 2021 period, primarily in our Americas RAC segment, resulting from vehicle acquisitions to refresh our fleet following Chapter 11 in 2021. Revenue earning vehicle disposal proceeds increased $1.7 billion for the first half of 2022 compared to the 2021 period resulting from increased vehicle dispositions due to strength in residual values.

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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED)

~~The table below sets forth expenditures for revenue earning vehicles, net of disposal proceeds:~~

Cash inflow (cash outflow) Nine Months Ended
September 30,
($ in millions) 2021 2020 $ Change % Change
Americas RAC $ (2,704) $ 3,122 $ (5,826) NM
International RAC (463) 672 (1,135) NM
All other operations (84) (212) 128 (60)
Total $ (3,251) $ 3,582 $ (6,833) NM

~~NM - Not meaningful~~

Revenue earning vehicle expenditures increased approximately $828 million in the third quarter of 2021 compared to the 2020 period, primarily in our Americas RAC segment, resulting from the acquisition of used vehicles to meet the increased travel demand as government-imposed travel restrictions began to lift. Revenue earning vehicle expenditures, net decreased $6.8 billion for the nine months ended September 30, 2021 compared to the nine months ended September 30, 2020 due primarily to fewer vehicle dispositions and longer vehicle holding periods resulting from the Chip Shortage affecting new vehicle production, primarily in our Americas RAC segment.

Non-Vehicle Capital Asset Expenditures and Disposals

The table below sets forth our non-vehicle capital asset expenditures and related disposal proceeds from non-vehicle capital assets disposed of or to be disposed of for the periods shown:


Cash inflow (cash outflow)	Cash inflow (cash outflow)	Non-Vehicle Capital Assets						Cash inflow (cash outflow)	Non-Vehicle Capital Assets
(In millions)	(In millions)	Capital Expenditures		Disposal Proceeds		Net Capital Expenditures		(In millions)	Capital Expenditures		Disposal Proceeds		Net Capital Expenditures
2022								2022
First Quarter								First Quarter	$	(30)	$	1	$	(29)
Second Quarter								Second Quarter	(29)		5		(24)

Total								Total	$	(59)	$	6	$	(53)
2021	2021							2021
First Quarter	First Quarter	$	(9)	$	4	$	(5)	First Quarter	$	(9)	$	4	$	(5)
Second Quarter	Second Quarter	(8)		6		(2)		Second Quarter	(8)		6		(2)
Third Quarter		(24)		7		(17)

Total	Total	$	(41)	$	17	$	(24)	Total	$	(17)	$	10	$	(7)
2020
First Quarter		$	(59)	$	23	$	(36)
Second Quarter		(13)		27		14
Third Quarter		(17)		6		(11)

Total		$	(89)	$	56	$	(33)

Non-vehicle capital asset expenditures increased by $7 million, or 41%, in the third quarter of 2021 compared to the 2020 period due primarily to increased information technology and finance transformation program costs resulting from previously deferred projects due to COVID-19 and the Chapter 11 Cases. Non-vehicle capital asset expenditures decreased by $48 million, or 54%, in the nine months ended September 30, 2021 compared to the nine months ended September 30, 2020 due primarily to a decrease in information technology and finance transformation program costs.

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~~HERTZ GLOBAL HOLDINGS, INC. AND SUBSIDIARIES~~

~~THE HERTZ CORPORATION AND SUBSIDIARIES~~

~~ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED)~~

The table below sets forth non-vehicle capital asset expenditures, net of disposal proceeds:


Cash inflow (cash outflow)	Cash inflow (cash outflow)	Nine Months Ended September 30,							Cash inflow (cash outflow)	Six Months Ended June 30,
($ in millions)	($ in millions)	2021		2020		$ Change		% Change	($ in millions)	2022		2021		$ Change		% Change
Americas RAC	Americas RAC	$	(13)	$	5	$	(18)	NM	Americas RAC	$	(45)	$	(3)	$	(42)	NM
International RAC	International RAC	(3)		(3)		—		NM	International RAC	(5)		(1)		(4)		NM
All other operations(1)	All other operations(1)	(1)		(4)		3		(75)	All other operations(1)	—		(1)		1		(100)
Corporate	Corporate	(7)		(31)		24		(77)	Corporate	(3)		(2)		(1)		50
Total	Total	$	(24)	$	(33)	$	9	(27)	Total	$	(53)	$	(7)	$	(46)	NM

(1) Substantially comprised of our Donlen business, which was sold on March 30, 2021 as disclosed in Note 3, "Divestitures," in Part I, Item 1 of this Quarterly Report.

NM - Not meaningful

In the first half of 2022, expenditures for non-vehicle capital assets increased by $42 million compared to the 2021 period, primarily in our Americas RAC segment, resulting from the restart of location refurbishment projects put on hold during the Chapter 11 Cases.

CONTRACTUAL OBLIGATIONS

~~Prior to the Effective Date, the Bankruptcy Court approved the rejection~~As of real property leases pursuant to section 365 of the Bankruptcy Code comprised of 278 off airport locations and 34 airport locations in our Americas RAC segment. These rejections did not materially change the minimum fixed obligations for operating leases as disclosed in our 2020 Form 10-K.

Material changes to our aggregate indebtedness resulting from the Chapter 11 Emergence are disclosed in Note 6, "Debt," in Part I, Item 1 of this Quarterly Report on Form 10-Q. The following table details our contractual cash obligations related to our indebtedness as of SeptemberJune 30, ~~2021:~~

Payments Due by Period
(In millions) Total 2021 2022 to 2023 2024 to 2025 After 2025
Vehicles:
Debt obligation $ 7,241 $ 34 $ 3,186 $ 2,021 $ 2,000
Interest on debt(1)
434 35 236 120 43
Non-Vehicle:
Debt obligation 1,556 5 37 27 1,487
Interest on debt(1)
527 21 150 158 198
Total $ 9,758 $ 95 $ 3,609 $ 2,326 $ 3,728

(1) Amounts represent the estimated commitment fees and interest payments based on the principal amounts, minimum non-cancelable maturity dates and interest rates on the debt as of September 30, 2021.

~~Excluding the commitments previously discussed,~~2022, there have been no material changes outside of the ordinary course of business to our known contractual obligations as set forth in the table included in Part II, Item 7 ~~"Management's Discussion~~of our 2021 Form 10-K. Changes to our aggregate indebtedness, including related interest and ~~Analysis~~terms of ~~Financial Condition and Results~~new issuances, are disclosed in Note 5, "Debt," in Part I, Item 1 of ~~Operations," included in our 2020 Form 10-K.~~this Quarterly Report.

OFF-BALANCE SHEET COMMITMENTS AND ARRANGEMENTS

Indemnification Obligations

There have been no significant changes to our indemnification obligations as compared to those disclosed in Note 14, "Contingencies and Off-Balance Sheet Commitments," in Part II, Item 8 of our ~~2020~~2021 Form 10-K.

We regularly evaluate the probability of having to incur costs associated with these indemnification obligations and have accrued for expected losses that are probable and estimable.

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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED)

RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

~~For a discussion of recent~~There have been no significant changes due to recently issued accounting pronouncements ~~see~~as compared to those disclosed in Note 2, ~~"Basis of Presentation and Recently Issued~~"Significant Accounting ~~Pronouncements,~~Policies," in Part I,II, Item 18 of ~~this Quarterly Report on~~our 2021 Form ~~10-Q.~~10-K.

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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED)

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

Certain statements contained or incorporated by reference in this Quarterly Report ~~on Form 10-Q~~ include "forward-looking statements." Forward-looking statements ~~include information concerning our liquidity and our possible or assumed future results of operations, including descriptions of our business strategies. These statements often include~~are identified by words such as "believe," "expect," "project," "potential," "anticipate," "intend," "plan," "estimate," "seek," "will," "may," "would," "should," "could," "forecasts," "guidance" or similar ~~expressions.~~expressions, and include information concerning our liquidity, our results of operations, our business strategies and other information about our business. These statements are based on certain assumptions that we have made in light of our experience in the industry as well as our perceptions of historical trends, current conditions, expected future developments and other factors we believe are ~~appropriate in these circumstances.~~appropriate. We believe these judgments are reasonable, but you should understand that these statements are not guarantees of future performance or results and our actual results could differ materially from those expressed in the forward-looking statements due to a variety of important factors, both positive and negative.

Important factors that could affect our actual results and cause them to differ materially from those expressed in forward-looking statements include, among other things, those that may be disclosed from time to time in subsequent reports filed with or furnished to the SEC, those described under Item 1A, "Risk Factors," included in our ~~2020~~2021 Form 10-K and this Quarterly Report ~~on Form 10-Q~~ and the following, which were derived in part from the risks set forth in Item 1A, "Risk Factors," of our ~~2020~~2021 Form 10-K and this Quarterly ~~Report on Form 10-Q:~~Report:

•~~the impact of our recent emergence from Chapter 11 on our business and relationships;~~

•~~levels of travel demand, particularly with respect to business and leisure travel in the U.S. and in global markets;~~

•the length and severity of COVID-19 and the impact on our vehicle rental business as a result of travel restrictions and business closures or ~~disruptions;~~disruptions, as well as the impact on our employee retention and talent management strategies;

•the impact of ~~COVID-19~~macroeconomic conditions resulting in inflationary cost pressures resulting in labor and ~~actions taken~~supply chain constraints, increased vehicle acquisition costs, and reductions in ~~response to the pandemic on global and regional economies and economic factors;~~

•~~general economic uncertainty and the pace of economic recovery, including in key global markets, when COVID-19 subsides;~~travel demand, among others;

•our ability to ~~implement our business strategy, including our ability to implement plans to support~~purchase adequate supplies of competitively priced vehicles at a ~~large scale electric vehicle fleet~~reasonable cost as a result of the continuing global semiconductor microchip manufacturing shortage (the "Chip Shortage") and ~~to play a central role in the modern mobility ecosystem;~~other raw material supply constraints;

•the impact of the conflict between Russia and Ukraine on supply chains and raw materials for the automotive industry and uncertainty on overall consumer sentiment and travel demand, especially in Europe;

•the impact on the value of our non-program vehicles upon disposition when the Chip Shortage and other raw material supply constraints are alleviated;

•our ability to attract and retain key ~~personnel following our emergence from bankruptcy;~~employees;

•~~our ability to utilize our net operating loss carryforwards~~levels of travel demand, particularly business and ~~built-in losses as a result of our emergence from bankruptcy;~~

•~~our ability to remediate the material weaknesses in our internal controls over financial reporting;~~

•~~our ability to maintain an effective employee retention and talent management strategy and resulting changes in personnel and employee relations;~~

•~~the recoverability of our goodwill and indefinite-lived intangible assets when performing impairment analysis;~~

•~~our ability to dispose of vehicles~~leisure travel in the ~~used-vehicle market, use the proceeds of such sales to acquire new vehicles~~U.S. and ~~to reduce exposure to residual risk;~~

•~~actions creditors may take with respect to the vehicles used~~ in ~~the rental car operations;~~global markets;

•significant changes in the competitive environment and the effect of competition in our markets on rental volume and pricing;

•occurrences that disrupt rental activity during our peak periods;

•our ability to accurately estimate future levels of rental activity and adjust the number and mix of vehicles used in our rental operations accordingly;

•our ability to implement our business strategy, including our ability to implement plans to support a large scale electric vehicle fleet and to play a central role in the modern mobility ecosystem;

•our ability to adequately respond to changes in technology, customer demands and market competition;

•the mix of program and non-program vehicles in our fleet can lead to increased exposure to residual risk;

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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED)

•our ability to ~~retain and increase customer loyalty and market share;~~

•~~increased vehicle costs due to declining value of our non-program vehicles;~~

•~~our ability to maintain sufficient liquidity and the availability to us of additional or continued sources of financing for our revenue earning vehicles and to refinance our existing indebtedness;~~

•risks related to our indebtedness, including our present level of debt, our ability to incur substantially more debt, the fact that substantially all of our consolidated assets secure certain of our outstanding indebtedness and increases in interest rates or in our borrowing margins;

•~~our ability to meet the financial and other covenants contained in our First Lien Credit Agreement and certain asset-backed and asset-based arrangements;~~

•~~our ability to access financial markets, including the financing of our vehicle fleet through the issuance of asset-backed securities;~~

•~~fluctuations in interest rates, foreign currency exchange rates and commodity prices;~~

•~~our ability to sustain operations during adverse economic cycles and unfavorable external events (including war, escalation of hostilities, terrorist acts, natural disasters and epidemic disease);~~

•~~our ability to prevent the misuse or theft of information we possess, including as a result of cyber security breaches and other security threats;~~

•~~our ability to adequately respond to changes in technology, customer demands and market competition;~~

•~~our ability to successfully implement any strategic transactions;~~

•~~our ability to achieve anticipated cost savings from on-going strategic initiatives;~~

•~~the impact on the value of, or interest earned on, any LIBOR-based marketable securities, fleet leases, loans and derivatives as a result of changes to the LIBOR reference rate;~~

•our ability to purchase adequate supplies of competitively priced vehicles at a reasonable cost as a result of the continuing global chip manufacturing shortage and other raw material supply constraints;

•~~the impact of the global chip shortage and other raw material supply constraints on asset acquisition costs, resulting depreciation expense and ultimately the residual values on the disposition~~dispose of vehicles in ~~our fleet;~~

•~~our recognition~~the used-vehicle market and use the proceeds of ~~previously deferred tax gains on the disposition of revenue earning~~such sales to acquire replacement vehicles;

•financial instability of the manufacturers of our vehicles, which could impact their ability to fulfill obligations under repurchase or guaranteed depreciation programs;

•an increase in our vehicle costs or disruption to our rental activity ~~particularly during our peak periods,~~ due to safety recalls by the manufacturers of our vehicles;

•~~our ability to execute a business continuity plan;~~

•our access to third-party distribution channels and related prices, commission structures and transaction volumes;

•our ability to offer an excellent customer experience, and retain and increase customer loyalty and market share;

•our ability to maintain our network of leases and vehicle rental concessions at airports in the U.S. and internationally;

•our ability to maintain favorable brand recognition and a coordinated branding and portfolio strategy;

•major disruption in our communication or centralized information networks or a failure to maintain, upgrade and consolidate our information technology systems;

•our ability to prevent the misuse or theft of information we possess, including as a result of cyber security breaches and other security threats, as well as our ability to comply with privacy regulations;

•risks associated with operating in many different countries, including the risk of a violation or alleged violation of applicable anti-corruption or anti-bribery laws and our ability to repatriate cash from non-U.S. affiliates without adverse tax consequences;

•~~a major disruption in~~ our ~~communication or centralized information networks;~~ability to utilize our net operating loss carryforwards;

•~~a failure~~risks relating to ~~maintain, upgrade~~tax laws, including those that affect our ability to deduct certain business interest expenses and ~~consolidate~~offset previously-deferred tax gains, as well as any adverse determinations or rulings by tax authorities;

•changes in laws, regulations, policies or other activities of governments, agencies and similar organizations, including those related to accounting principles, that affect our ~~information technology systems;~~operations, our costs or applicable tax rates;

•

~~Table~~the recoverability of ~~Contents~~our goodwill and indefinite-lived intangible assets when performing impairment analysis;

~~HERTZ GLOBAL HOLDINGS, INC. AND SUBSIDIARIES~~

~~THE HERTZ CORPORATION AND SUBSIDIARIES~~

~~ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (CONTINUED)~~

•costs and risks associated with potential litigation and investigations, ~~or any failure or inability to comply~~compliance with and changes in laws and regulations ~~or any changes in the legal~~ and ~~regulatory environment;~~

•~~our ability to maintain our network of leases~~potential exposures under environmental laws and ~~vehicle rental concessions at airports in the U.S. and internationally;~~

•~~our ability to maintain favorable brand recognition and a coordinated branding and portfolio strategy;~~

•changes in the existing, or the adoption of new laws, regulations, policies or other activities of governments, agencies and similar organizations, where such actions may affect our operations, the cost thereof or applicable tax rates;

•~~risks relating to our deferred tax assets, including the risk of an "ownership change" under the Internal Revenue Code of 1986, as amended;~~

•~~our exposure to uninsured claims in excess of historical levels and inability to collect on subrogation;~~

•~~risks relating to our participation in multiemployer pension plans;~~

•~~shortages of fuel and increases or volatility in fuel costs;~~

•~~our ability to manage our relationships with unions;~~

•~~changes in accounting principles, or their application or interpretation, and our ability to make accurate estimates and the assumptions underlying the estimates;~~regulations; and

•~~other risks~~the availability of additional or continued sources of financing for our revenue earning vehicles and ~~uncertainties described from time~~ to ~~time in periodic and current reports that we file with the SEC.~~refinance our existing indebtedness.

You should not place undue reliance on forward-looking statements. All forward-looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by the foregoing cautionary statements. All such statements speak only as of the date of this Quarterly Report ~~on Form 10-Q,~~ and, except as required by law, we undertake no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise.

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THE HERTZ CORPORATION AND SUBSIDIARIES

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

We are exposed to a variety of market risks, including the effects of changes in interest rates (including credit spreads), foreign currency exchange rates and fluctuations in fuel prices. We manage our exposure to these market risks through our regular operating and financing activities and, when deemed appropriate, through the use of derivative financial instruments. Derivative financial instruments are viewed as risk management tools and have not been used for speculative or trading purposes. In addition, derivative financial instruments are entered into with a diversified group of major financial institutions in order to manage our exposure to counterparty nonperformance on such instruments.

As a result of our declining credit profile from the impact from COVID-19, we were no longer able to enter into certain derivative financial instruments or renew existing derivative financial instruments in order to mitigate market risks arising from the effects of changes in foreign currency exchange rates and interest rates (including credit spreads). As a result, we had exposure to foreign currency exchange rate fluctuations on cross currency obligations, primarily intercompany loans. As a result of our emergence from Chapter 11, during the third quarter of 2021, we began to enter into foreign currency exchange rate derivative financial instruments, which are not material. Assuming a hypothetical change of one percentage point to the foreign currency exchange rates on our intercompany loan balance as of September 30, 2021, our pre-tax operating results would increase (decrease) by approximately $4 million.

~~Other Income Tax Related Matters~~

~~In the second quarter of 2021, the IRS concluded its audit of our 2016 tax year which resulted in no audit adjustments.~~

In 2016, the German Tax Authorities provided us with an assessment which asserted that we underreported our German taxable income for our 2005–2010 tax years based on the German Tax Authorities’ belief that certain transfer pricing matters made by the U.S. to our German entity were overstated. To avoid the double taxation resulting in these tax years from this assessment, we pursued U.S. and German competent authority relief. We received notification from the German and U.S. tax authorities during June 2021 indicating resolution of the transfer pricing matter covering the 2005-2010 tax years. We have reassessed our uncertain tax positions upon receipt of the new information related to the matter for tax years 2011 through 2021, which did not result in a material adjustment. Our assumptions and estimates pertaining to uncertain tax positions require significant judgment. It is possible that the tax authorities could challenge our estimates and assumptions used to assess the tax benefits, and the actual amount of the tax benefit related to uncertain tax positions may differ materially from these estimates.

Our emergence from Chapter 11 resulted in a change in ownership for purposes of Internal Revenue Code ("IRC") Section 382. The Company analyzed alternatives available within the IRC to taxpayers in Chapter 11 in order to minimize the impact of the ownership change and cancellation of indebtedness income on its tax attributes. Limitations imposed on our ability to use U.S. net operating losses ("NOLs") and other tax attributes to offset future taxable income may cause U.S. federal income taxes to be paid earlier than otherwise would be paid if such limitations were not in effect and could cause such NOLs to expire unused, in each case reducing or eliminating the benefit of such NOLs. Similar rules and limitations may apply for state income tax purposes.

~~Except for the effects described above, there~~There have been no ~~other~~ material changes to the information reported under Part II, Item 7A ~~"Quantitative and Qualitative Disclosures About Market Risk," in~~of our ~~2020~~2021 Form 10-K.

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~~(DEBTORS-IN-POSSESSION)~~

ITEM 4. CONTROLS AND PROCEDURES

HERTZ GLOBAL

Evaluation of Disclosure Controls and Procedures

Our senior management has evaluated the effectiveness of the design and operation of our disclosure controls and procedures (as defined under Exchange Act Rules 13a-15(e) and 15d-15(e)) as of the end of the period covered by this Quarterly ~~Report on Form 10-Q.~~Report. Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that as of ~~September~~June 30, ~~2021, due to the identification of a material weakness in~~2022, our ~~internal control over financial reporting, as further described in Item 9A of our 2020 Form 10-K, the Company’s~~ disclosure controls and procedures were not effective to provide reasonable assurance that the information required to be disclosed by us in the reports that we file or submit under the Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to management as appropriate to allow timely decisions regarding required disclosure.effective.

Changes in Internal Control over Financial Reporting

~~During~~There were no changes in our internal control over financial reporting that occurred during the three months ended ~~September~~June 30, ~~2021, we have taken, and continue to take, actions to remediate our existing information technology general controls (“ITGCs”) material weakness, which have~~2022 that materially affected, or are reasonably likely to materially affect, ~~the Company’s~~our internal control over financial reporting.

Our remediation efforts were ongoing during the three months ended September 30, 2021. The material weakness cannot be considered remediated until the applicable remedial controls operate for a sufficient period of time and management has concluded, through testing, that these controls are operating effectively.

HERTZ

Evaluation of Disclosure Controls and Procedures

Changes in Internal Control over Financial Reporting

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PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

~~Information related to the Chapter 11 Cases that were filed on May 22, 2020 is included in Note 1, "Background," in Part 1, Item 1 of this Quarterly Report on Form 10-Q.~~

For a description of certain pending legal proceedings see Note ~~14,~~12, "Contingencies and Off-Balance Sheet Commitments," in Part I, Item 1 of this Quarterly ~~Report on Form 10-Q.~~Report.

ITEM 1A. RISK FACTORS

Part I, Item 1A ~~“Risk Factors,”~~ of our ~~2020~~2021 Form 10-K for the year ended December 31, ~~2020,~~2021, includes certain risk factors that could materially affect our business, financial condition or future results. There have been no material changes in those risk factors, except as listed below:

~~Risks Related to our Emergence from Chapter 11 Bankruptcy~~

~~We recently emerged from bankruptcy, which could adversely affect our business and relationships.~~

Our having filed for bankruptcy, notwithstanding our recent emergence from the Chapter 11 bankruptcy proceedings, could adversely affect our business and relationships with customers, vendors, royalty or working interest owners, contractors, employees or suppliers. Due to uncertainties, many risks exist, including the following:

•~~the ability to attract, motivate, and/or retain key executives and employees may be adversely affected;~~

•~~employeesmay~~be~~moreeasilyattracted~~to~~otheremploymentopportunities; and~~

•~~competitorsmaytakebusinessawayfromus,andourabilityto retain customers may be negatively impacted.~~

The occurrence of one or more of these events could have a material and adverse effect on our operations, financial condition and reputation and we cannot assure you that having been subject to bankruptcy proceedings will not adversely affect our operations in the future.

~~Upon our emergence from bankruptcy, our Board of Directors was reconstituted and may implement changes in our business strategy that could affect the scope and results of our operations.~~

Our corporate business strategy is subject to continued development, evaluation and implementation by our management and Board of Directors. In connection with the effectiveness of the Plan in the Chapter 11 Cases, the Company’s Board of Directors was reconstituted, and the Board is now made up of nine directors, of which eight directors did not serve on the former Board. We may also add up to two additional members in the future. The new directors have different backgrounds, experiences and perspectives from those individuals who previously served on the board of directors of the Company at the time of the commencement of the Chapter 11 Cases and, thus, may have different views on the issues that will determine our future, including our strategic plans and priorities. The Board of Directors, as reconstituted, together with our interim CEO, may determine, from time to time, to implement changes in our business strategy which may affect our operations. There is, however, no guarantee that the strategic initiatives and plans, whether current or future, of the Board of Directors will be implemented in a timely manner or at all and, consequently, there is no guarantee that the operational and financial objectives of the reconstituted Board of Directors will be achieved in a timely manner or at all.

~~The ability to attract and retain key personnel is critical to the success of our business and may be affected by our emergence from bankruptcy.~~

The success of our business depends on key personnel. The ability to attract and retain these key personnel may be affected by our emergence from bankruptcy, the uncertainties currently facing the business and changes we may

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~~ITEM 1A. RISK FACTORS (CONTINUED)~~

make to the organizational structure to adjust to changing circumstances. Any potential delays in adopting our management incentive plan and other executive benefits and compensation may make it difficult to retain key personnel and we may need to enter into retention or other arrangements that could be costly to maintain. If executives, managers or other key personnel resign, retire or are terminated, or their service is otherwise interrupted, we may not be able to replace them in a timely manner and we could experience significant declines in productivity.

~~Our ability to utilize our net operating loss carryforwards (“NOLs”) may be limited as a result of our emergence from bankruptcy.~~

In general, Section 382 of the Internal Revenue Code (“IRC”) of 1986, as amended, provides an annual limitation with respect to the ability of a corporation to utilize its NOLs and other tax attributes, as well as certain built-in-losses ("BILs"), against future taxable income in the event of a change in ownership. Our emergence from Chapter 11 bankruptcy proceedings resulted in a change in ownership for purposes of the IRC Section 382. The Company is performing an analysis to determine the potential impact this ownership change may have on our future ability to utilize our NOLs, other tax attributes and BILs.

Limitations imposed on our ability to use NOLs, other tax attributes and BILs to offset future taxable income may cause U.S. federal income taxes to be paid earlier than otherwise would be paid if such limitations were not in effect and could cause such NOLs and other tax attributes to expire unused. Similar rules and limitations may apply for state income tax purposes.

~~We have a substantial amount of debt, which could impair our financial condition.~~

We have a significant amount of indebtedness. As of September 30, 2021, we had a total indebtedness of approximately $8.7 billion, including $7.2 billion of vehicle related debt and $1.5 billion of non-vehicle debt. In addition, we would be able to incur an additional approximately $2.0 billion of indebtedness under one or more incremental facilities, subject to certain thresholds as described in the First Lien Credit Agreement, including estimated available borrowing capacity of $1.1 billion under the First Lien RCF. Our substantial level of indebtedness increases the risk that we may be unable to generate cash sufficient to pay amounts due in respect of our indebtedness. Our substantial indebtedness could have other important consequences to you and significant effects on our business. For example, it could:

•~~limit our ability to borrow additional amounts to fund working capital, capital expenditures, debt service requirements, execution of our business strategy or acquisitions and other purposes;~~

•~~require us to dedicate a substantial portion of our cash flow from operations to pay principal and interest on our debt, which would reduce the funds available to us for other purposes;~~

•~~make us more vulnerable to adverse changes in general economic, industry and competitive conditions, in government regulation and in our business;~~

•expose us to risks inherent in interest rate fluctuations because some of our borrowings are at variable rates of interest, which could result in higher interest expenses in the event of increases in interests rates; and

•~~make it more difficult to satisfy our obligations.~~

Our ability to satisfy and manage our debt obligations depends on our ability to generate cash flow and on overall financial market conditions. To some extent, this is subject to prevailing economic and competitive conditions and to certain financial, business and other factors, many of which are beyond our control. Our business may not generate sufficient cash flow from operations to permit us to pay principal, premium, if any, or interest on our debt obligations. If we are unable to generate sufficient cash flow from operations to service our debt obligations and meet our other cash needs, we may be forced to reduce or delay capital expenditures, sell or curtail assets or operations, seek additional capital, or seek to restructure or refinance our indebtedness. If we must sell or curtail our assets or operations, it may negatively affect our ability to generate revenue.

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~~ITEM 1A. RISK FACTORS (CONTINUED)~~

Risks Related to our Business

Our business, financial condition and results of operations could be adversely affected by disruptions in the global economy caused by the ongoing conflict between Russia and Ukraine.

The ~~continuing semiconductor microchip~~global economy has been negatively impacted by the military conflict between Russia and Ukraine. Furthermore, governments in the U.S., United Kingdom, and European Union have each imposed export controls on certain products and financial and economic sanctions on certain industry sectors and parties in Russia. Shortages in materials and increased costs for transportation, energy, and raw material, as well as uncertainty on overall consumer sentiment and travel demand, especially in Europe, are some of the negative impacts of the Russia-Ukraine military conflict on the global economy. In particular, shortages and increased costs relating to raw materials extracted from, or components produced in, Russia and/or Ukraine, which are important to the vehicle manufacturing ~~shortage~~industry including the production of electric vehicle batteries, may ~~be disruptive~~impact vehicle production volumes, delivery schedules and costs. Further escalation of geopolitical tensions related to ~~our vehicle rental business~~the military conflict, including increased trade barriers or restrictions on global trade, could result in, among other things, cyberattacks, supply disruptions, lower consumer demand, and changes to foreign exchange rates and financial markets, any of which may adversely affect our business ~~results of operations~~ and ~~financial condition.~~

Increased demand for semiconductor microchips ("Chips") in 2020, due in part to COVID-19 and an increased use of electronic equipment that use these Chips, has resulted in a severe shortage of Chips in 2021. These same Chips and microprocessors are used in a variety of automobile parts, includingfurther exacerbate supply chain issues in the ~~control of engines and transmissions. As a result, various~~ automotive manufacturers have been forced to delay or stall new vehicle production. If efforts to address the shortage of Chips by the industry and government entities are unsuccessful, there may be further delays in new vehicle production. Consequently, there is no guarantee that we can purchase a sufficient number of new vehicles at competitive prices and on competitive terms and conditions. If we are unable to obtain a sufficient supply of new vehicles, or if we obtain less favorable pricing and other terms during the acquisition of vehicles and are unable to recover from the increased costs then our results of operations, financial condition, liquidity and cash flows may be materially adversely affected. If we are unable to purchase new vehicles at competitive prices, increased maintenance costs in relation to our existing fleet may put further pressure on our results of operations and financial condition.

~~We are implementing new strategic initiatives, which may not be as successful as we anticipate.~~

We are entering into new partnerships centered around EV and technology, with the goal of positioning our business at the forefront of modern mobility. In October 2021, we announced several of these new initiatives as part of a plan to offer the largest EV rental fleet in North America, to lead in providing access to EVs for ride sharing and to digitize our vehicle disposition process. These efforts are aimed at positioning Hertz as a leader in sustainable mobility and technology. There are a number of risks associated with these strategic initiatives, including but not limited to the inability to secure adequate vehicle supply, a potential lack of adequate infrastructure to support EVs, potentially high costs associated with maintaining or repairing EVs and related infrastructure, increased risks related to the data connectivity and the technology upon which these initiatives will rely, such as unauthorized access to modify or use such technology, possible competition from other vehicle rental providers that may also implement similar strategies, and the possibility that our strategic initiatives are not as well-received by our consumer base as anticipated. Moreover, our recently announced investment in Tesla EVs exposes us to a number of risks related to the concentration of such vehicles in our fleet, including the risk that demand for Tesla Model 3 vehicles by our customers may be lower than we anticipate, the potential inability to obtain an adequate level of supply of Tesla vehicles and any needed replacement parts for Tesla EVs due to malfunction, product recalls or use over time, risks related to Tesla’s ability to confirm orders and complete deliveries of such vehicles on a timely basis, and risks related to the battery cells on which Tesla EVs depend, including the safety of such products and their need to maintain and significantly grow access to battery cells.industry. In addition, the ~~success~~effects of the ongoing conflict could heighten many of our ~~initiative depends,~~known risks described in part, on the economics ultimately associated with EVs, including depreciation and residual values, which will impact the attractiveness of our EVs to rideshare drivers. These economics are evolving due to the developing nature of the EV market and outcomes associated with such economics that are currently unknown could materially impact the success of these initiatives. If we do not adequately address potential risks such as these, our future revenue potential may be impacted and our ability to pursue our strategic initiatives and attain profitability could be compromised.

Part I, Item 1A,
"Risk Factors"

~~The continued uncertainty about the duration of the negative impact from COVID-19~~ in our ~~industry may disrupt our employee retention and talent management strategies and affect our business operations.~~

We develop and maintain a talent management strategy that defines current and future talent requirements (e.g., experience, skills, location requirements, timing, etc.) based on our strategic direction, coordinated recruiting and development plans across businesses and regions and considers employee mobility, centers of excellence and shared service concepts to optimize resource plans and leverage labor arbitrage.

COVID-19 has created uncertainty with respect to the return to the workforce which affects our employee retention and talent management strategies. We cannot predict with certainty how the post-COVID return to workforce

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~~ITEM 1A. RISK FACTORS (CONTINUED)~~

measures will affect our employee retention and talent management strategies. The consequences that may result from continued disruptions or a failure of our employee retention and talent management strategies can include inadequate staffing levels, inability to support bankruptcy and emergence strategy, lack of key talent, declining product quality and competitive differentiation, or eroding employee morale and productivity.

We expect substantial cost savings from our ongoing strategic initiatives, and if we are unable to achieve these cost savings, or sustain our current cost structure, it could have a material adverse effect on our business operations, results of operations and financial condition.

We have not yet realized all of the cost savings we expect to achieve from our ongoing strategic initiatives. A variety of risks could cause us not to realize the expected cost savings, including but not limited to, higher than expected severance costs; higher than expected retention costs for continuing employees; higher than expected stand-alone overhead expenses; delays in the anticipated timing of activities related to our cost-savings plans; and other unexpected disruptions to our business.

~~Manufacturer safety recalls could create risks to our business.~~

The Raechel and Jacqueline Houck Safe Rental Car Act of 2015 prohibits us from renting or selling vehicles with open federal safety recalls and requires us to repair or address these recalls prior to renting or selling the vehicle. Any federal safety recall would require us to cease renting recalled vehicles until we can react to the recall. We cannot control the number of vehicles that may be subject to manufacturer recalls. If a large number of vehicles are the subject of a recall or if needed replacement parts are not in adequate supply, we may not be able to rent recalled vehicles for a significant period of time. The potential impact of a recall may be particularly severe if it impacts a model that comprises a significant proportion of our fleet, for example, as we continue to acquire significant numbers of Tesla Model 3 vehicles, or parts that are common across numerous model types, such as recalls of airbags in recent years. These types of disruptions could jeopardize our ability to fulfill existing contractual commitments or satisfy demand for our vehicles and could also result in the loss of business to our competitors. Depending on the severity of any recall, it could materially adversely affect, among other things, our revenues, create customer service problems, present liability claims, reduce the residual value of the recalled vehicles and harm our general reputation.

~~The interest rates of certain of our financing instruments are priced using a spread over LIBOR.~~

The London interbank offered rate (“LIBOR”) is the basic rate of interest used in lending between banks on the London interbank market and is widely used as a reference for setting the interest rate on loans globally. We typically use LIBOR as a reference rate in various of our financing transactions such that the interest due to the creditors pursuant to such financing transactions is calculated using LIBOR. Our term loan agreement also contains a stated minimum floor value for LIBOR.

On July 27, 2017, the United Kingdom’s Financial Conduct Authority, which regulates LIBOR, announced that it intends to phase out LIBOR by the end of 2021. It is unclear if at that time whether or not LIBOR will cease to exist, or if new methods of calculating LIBOR will be established such that it continues to exist after 2021 or if replacement conventions will be developed. The U.S. Federal Reserve, in conjunction with the Alternative Reference Rates Committee, a steering committee comprised of large U.S. financial institutions, is considering replacing U.S. dollar LIBOR with a new index calculated by short-term repurchase agreements, backed by Treasury securities (“SOFR”). SOFR is observed and backward-looking, which stands in contrast with LIBOR under the current methodology, which is an estimated forward-looking rate and relies, to some degree, on the expert judgment of submitting panel members. Given that SOFR is a secured rate backed by government securities, it will be a rate that does not take into account bank credit risk (as is the case with LIBOR). Whether or not SOFR attains market traction as a LIBOR replacement tool remains in question. As such, the future of LIBOR at this time is uncertain. At this time, due to a lack of consensus as to what rate or rates may become accepted alternatives to LIBOR, it is impossible to predict the effect of any such alternatives on our liquidity. However, if LIBOR ceases to exist, we may need to renegotiate certain of our financing agreements that utilize LIBOR as a factor in determining the interest rate to replace LIBOR with the new standard that is established. As of September 30, 2021, we had $4.8 million in outstanding

Form 10-K.

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~~ITEM 1A. RISK FACTORS (CONTINUED)~~

indebtedness tied to LIBOR. Additionally, these changes may have an impact on the value of or interest earned on any LIBOR-based marketable securities, fleet leases, loans and derivatives that are included in our financial assets and liabilities.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

~~None.~~The following table provides a breakdown of our equity security repurchases during the second quarter of 2022.


	(a) Total number of shares purchased	(b) Average price paid per share		(c) Total number of shares purchased as part of the publicly announced plan or program	(d) Maximum number (or approximate dollar value) of shares that may yet be purchased under the publicly announced plan or program (In thousands)
Common Stock
April 1 – April 30, 2022	4,527,052	$	22.26	4,527,052	$	769,702
May 1 – May 31, 2022	21,877,455	$	19.14	21,877,455	$	351,020
June 1 – June 30, 2022	20,515,479	$	18.09	20,515,479	$	1,979,998
Total	46,919,986	$	18.98	46,919,986	$	1,979,998

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quarter of 2022, the Company completed the 2021 Share Repurchase Program. A total of 97,783,047 shares of Hertz Global common stock were repurchased since the inception of this program for an aggregate purchase price of $2.0 billion.

Repurchases under the 2022 Share Repurchase Program may be made from time to time in the open market, pursuant to pre-set trading plans meeting the requirements of Rule 10b5-1 under the Securities Exchange Act of 1934, in private transactions or otherwise. The authorization does not have a stated expiration date. The timing and actual number of shares to be repurchased in the future will depend on a variety of factors, including the Company's financial position, earnings, share price, market conditions and other factors. The repurchase program does not obligate Hertz Global to acquire any particular amount of common stock and may be discontinued at any time. There can be no assurance as to the timing or number of any share repurchases.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 5. OTHER INFORMATION

~~None.~~The Company’s former Executive Vice President, General Counsel and Secretary, Mr. M. David Galainena retired effective June 30, 2022. On April 25, 2022, the Board of Directors of Hertz Holdings, upon recommendation of its Compensation Committee, approved certain amendments to Mr. Galainena’s compensation in light of his agreement to remain with the Company to facilitate a transition of his duties. The amendments provided Mr. Galainena certain benefits in addition to those to which he is entitled under the severance provisions of the Plan of Reorganization, contingent on his remaining with the Company through June 30, 2022 and executing a release of claims in favor of the Company. Pursuant to the amendments, on June 30, 2022, Mr. Galainena’s last day of employment (the “Employment Termination Date”), (i) he received a cash payment equal to his target bonus for fiscal year 2022, pro-rated through the Employment Termination Date, (ii) an aggregate of 26,667 restricted stock units and 80,000 stock options vested, and (iii) the exercise period for his vested stock options was extended to June 30, 2023.

ITEM 6. EXHIBITS

(a)Exhibits:

The attached list of exhibits in the "Exhibit Index" immediately following the signature page to this Quarterly Report ~~on Form 10-Q~~ is filed as part of this Quarterly Report ~~on Form 10-Q~~ and is incorporated herein by reference in response to this item.

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SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrants have duly caused this report to be signed on their behalf by the undersigned thereunto duly authorized.


Date:	~~October~~July 28, ~~2021~~2022	HERTZ GLOBAL HOLDINGS, INC. THE HERTZ CORPORATION (Registrants)
		By:	/s/ KENNY CHEUNG
			Kenny Cheung Executive Vice President and Chief Financial Officer

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EXHIBIT INDEX


Exhibit Number		Description
10.1	Hertz Holdings Hertz	F ~~orm~~Amended and Restated Series 2021-A Supplement, dated as of ~~Employee~~ ~~Retention Letter Agreement (Incorporated~~June 24, 2022, among Hertz Vehicle Financing III LLC, as issuer, The Hertz Corporation, as administrator, Deutsche Bank AG, New York Branch, as program agent, the several committed note purchasers party thereto, the several conduit investors party thereto, the several funding agents for the investor groups party thereto and The Bank of New York Mellon Trust Company, N.A., as trustee (incorporated by reference to Exhibit 10.1 to the Current Report ~~on Form 8-K~~ of Hertz Global Holdings, Inc. (File No. 001-37665), and The Hertz Corporation (File No. 001-07541) as filed ~~on August 17, 2021).~~June 27, 2022)†.
10.2	Hertz Holdings Hertz	Amendment No. 5 dated June 23, 2022 to Credit Agreement dated June 30, 2021, by and among The Hertz ~~Global Holdings, Inc. Severance Plan for Senior Executives(Incorporated~~Corporation and the subsidiary borrowers party thereto as borrowers, the several lenders and issuing lenders from time to time parties thereto, and Barclays Bank PLC, as administrative agent and collateral agent (incorporated by reference to Exhibit 10.2 to the Current Report ~~on Form 8-K~~ of Hertz Global Holdings, Inc. (File No. 001-37665), and The Hertz Corporation (File No. 001-07541) as filed ~~on August 17, 2021).~~June 27, 2022)†.
10.3	Hertz Holdings Hertz	~~Offer Letter~~Amendment No. 1 dated June 27, 2022 to Base Indenture, dated as of June 29, 2021, between ~~Mark Fields~~Hertz Vehicle Financing III LLC, as issuer, and ~~Hertz Global Holdings, Inc. dated October 4, 2021(Incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K~~The Bank of ~~Hertz Global Holdings, Inc. (File No. 001-37665),~~New York Mellon Trust Company, N.A. as ~~filed on October 5, 2021).~~trustee†.*
10.4	Hertz Holdings Hertz	~~Second Amended~~Amendment No. 1 dated June 27, 2022 to Master Motor Vehicle Operating Lease and ~~Restated Offer Letter, Confidentiality and Non-Competition~~Servicing Agreement ~~between Paul Stone and Hertz Global Holdings, Inc. effective~~dated as of ~~October 5,~~June 29, 2021, ~~(Incorporated by reference~~ among Hertz Vehicle Financing III LLC, as lessor, The Hertz Corporation, as lessee, servicer and guarantor, DTG Operations, Inc. as lessee, and those permitted lessees from time to ~~Exhibit 10.2 to the Current Report on Form 8-K of Hertz Global Holdings, Inc. (File No. 001-37665), as filed on October 5,~~ ~~2021).~~time party thereto.†*
10.5	Hertz Holdings Hertz	Amendment No. 1 dated June 27, 2022 to Series 2021-1 Supplement, dated as of June 30, 2021, among Hertz ~~Global Holdings, Inc. Directors Compensation Policy(Incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K~~Vehicle Financing III LLC, as issuer, The Hertz Corporation, as administrator, and The Bank of ~~Hertz Global Holdings, Inc. (File No. 001-37665)~~New York Mellon Trust Company, N.A., as ~~filed on October 6, 2021~~).trustee.†*
10.6	Hertz Holdings Hertz	Amendment No. 1 dated June 27, 2022 to ~~Registration Rights~~Series 2021-2 Supplement, dated as of June 30, 2021, among Hertz Vehicle Financing III LLC, as issuer, The Hertz Corporation, as administrator, and The Bank of New York Mellon Trust Company, N.A., as trustee.*
10.7	Hertz Holdings Hertz	Amendment No. 1 dated June 27, 2022 to Series 2022-1 Supplement, dated as of January 19, 2022, among Hertz Vehicle Financing III LLC, as issuer, The Hertz Corporation, as administrator, and The Bank of New York Mellon Trust Company, N.A., as trustee.*
10.8	Hertz Holdings Hertz	Amendment No. 1 dated June 27, 2022 to 2022-2 Supplement, dated as of January 19, 2022, among Hertz Vehicle Financing III LLC, as issuer, The Hertz Corporation, as administrator, and The Bank of New York Mellon Trust Company, N.A., as trustee.*
10.9	Hertz Holdings Hertz	Amendment No. 1 dated June 27, 2022 to 2022-3 Supplement, dated as of March 30, 2022, among Hertz Vehicle Financing III LLC, as issuer, The Hertz Corporation, as administrator, and The Bank of New York Mellon Trust Company, N.A., as trustee.*
10.10	Hertz Holdings Hertz	Amendment No. 1 dated June 27, 2022 to 2022-4 Supplement, dated as of March 30, 2022, among Hertz Vehicle Financing III LLC, as issuer, The Hertz Corporation, as administrator, and The Bank of New York Mellon Trust Company, N.A., as trustee.*
10.11	Hertz Holdings Hertz	Amendment No. 1 dated June 27, 2022 to 2022-5 Supplement, dated as of March 30, 2022, among Hertz Vehicle Financing III LLC, as issuer, The Hertz Corporation, as administrator, and The Bank of New York Mellon Trust Company, N.A., as trustee.*
10.12	Hertz Holdings Hertz	Amended and Restated Issuer Facility Agreement dated as of ~~October 26, 2021~~June 21, 2022, by and among International Fleet Financing No. 2 B.V., Hertz Europe Limited, Credit Agricole Corporate and Investment Bank, certain committed note purchasers, conduit investors and funding agents named therein, and BNP Paribas Trust Corporation U.K. Limited.*

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EXHIBIT INDEX (Continued)


Exhibit Number		Description
10.13	Hertz Holdings Hertz	Amended and Restated Master Definitions and Constructions Agreement dated as off June 21, 2022, by and among International Fleet Financing No. 2 B.V., Hertz Automobielen Nederland B.V., Stuurgroep Fleet (Netherlands) B.V., Hertz France S.A.S., RAC Finance S.A.S., Hertz De Espana SL, Hertz Autovermietung GMBH, Hertz Fleet Limited, Eurotitrisation S.A., BNP Paribas Securities Services, BNP Paribas S.A., Credit Agricole Corporate and Investment Bank, Hertz Europe Limited, The Hertz Corporation, BNP Paribas Securities Services, Luxembourg Branch, TMF SFS Management BV, TMF France Management SARL, TMF SAS, KPMG S.A., BNP Paribas Trust Corporation UK Limited, BNP Paribas Securities Services, BNP Paribas S.A., Dublin Branch, BNP Paribas S.A., Netherlands Branch, Sanne Trustee Services Limited, certain committed note purchasers, conduit investors and funding agents named therein, Hertz Holdings Netherlands 2 B.V. and Hertz International Limited.*
10.14	Hertz Holdings Hertz	Amended and Restated Dutch Master Lease and Servicing Agreement dated as of June 21, 2022, by and among Stuurgroep Fleet (Netherlands) B.V., Hertz Automobielen Nederland B.V., those Permitted Lessees from time to time becoming Lessees thereunder, and BNP Paribas Trust Corporation UK Limited.*
10.15	Hertz Holdings Hertz	Amended and Restated French Master Lease and Servicing Agreement, dated as of June 21, 2022, by and among RAC Finance SAS., Hertz France SAS., those Permitted Lessees from time to time becoming Lessees thereunder, and BNP Paribas Trust Corporation UK Limited.*
10.16	Hertz Holdings Hertz	Amended and Restated German Master Lease and Servicing Agreement, dated as of June 21, 2022, by and among Hertz ~~Global~~Fleet Limited, Hertz Autovermietung GMBH, those Permitted Lessees from time to time becoming Lessees thereunder, and BNP Paribas Trust Corporation UK Limited.*
10.17	Hertz Holdings ~~Inc.~~Hertz	Amended and Restated Spanish Master Lease and Servicing Agreement dated as of June 21, 2022, by and among Stuurgroep Fleet (Netherlands) B.V., Stuurgroep Fleet (Netherlands) B.V., Sucursal en Espana, Hertz de Espana, S.L.U., those Permitted Lessees from time to time becoming Lessees thereunder, and BNP Paribas Trust Corporation UK Limited.*
10.18	Hertz Holdings Hertz	Form of Restricted Stock Unit Agreement (2022) under the ~~stockholders signatory thereto (Incorporated by reference to Exhibit 10.1 to~~2021 Omnibus Incentive Plan.†*
10.19	Hertz Holdings Hertz	Form of Performance Stock Unit Agreement (2022) under the ~~Current Report on~~ 2021 Omnibus Incentive Plan.†*
10.20	Hertz Holdings Hertz	Form ~~8-K~~ of Executive Sign-On Performance Stock Unit Agreement under the 2021 Omnibus Incentive Plan.†*
10.21	Hertz ~~Global~~ Holdings ~~Inc. (File No. 001-37665),~~Hertz	Aircraft Time Sharing Agreement dated as ~~filed on October 27, 2021).~~of April 22, 2022 between The Hertz Corporation and Stephen M. Scherr.†*
10.22	Hertz Holdings Hertz	Confidential Severance Agreement and General Release of Claims dated June 30, 2022 between The Hertz Corporation and M. David Galainena.†*
10.23	Hertz Holdings Hertz	Confidential Severance Agreement and General Release of Claims dated June 14, 2022 between The Hertz Corporation and Angela Brav.†*
31.1	Hertz Holdings	Certification of Chief Executive Officer pursuant to Rule 13a-14(a)/15d-14(a).*
31.2	Hertz Holdings	Certification of Chief Financial Officer pursuant to Rule 13a-14(a)/15d-14(a).*
31.3	Hertz	Certification of Chief Executive Officer pursuant to Rule 13a-14(a)/15d-14(a).*
31.4	Hertz	Certification of Chief Financial Officer pursuant to Rule 13a-14(a)/15d-14(a).*
32.1	Hertz Holdings	Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350.**
32.2	Hertz Holdings	Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350.**
32.3	Hertz	Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350.**
32.4	Hertz	Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350.**

Table of Contents

HERTZ GLOBAL HOLDINGS, INC. AND SUBSIDIARIES

THE HERTZ CORPORATION AND SUBSIDIARIES

EXHIBIT INDEX (Continued)


Exhibit Number		Description
101.INS	Hertz Holdings Hertz	InIine XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.
101.SCH	Hertz Holdings Hertz	Inline XBRL Taxonomy Extension Schema Document*
101.CAL	Hertz Holdings Hertz	Inline XBRL Taxonomy Extension Calculation Linkbase Document*
101.DEF	Hertz Holdings Hertz	Inline XBRL Taxonomy Extension Definition Linkbase Document*
101.LAB	Hertz Holdings Hertz	Inline XBRL Taxonomy Extension Label Linkbase Document*
101.PRE	Hertz Holdings Hertz	Inline XBRL Taxonomy Extension Presentation Linkbase Document*
104	Hertz Holdings Hertz	Cover Page Interactive Data File (Embedded within the Inline XBRL document)

______________________________________________________________________________

†Indicates management contract or compensatory plan or arrangement

* Filed herewith

** Furnished herewith

8567

~~Table of Contents~~

~~HERTZ GLOBAL HOLDINGS, INC. AND SUBSIDIARIES~~

~~THE HERTZ CORPORATION AND SUBSIDIARIES~~

Note: Certain instruments with respect to various additional obligations, which could be considered as long-term debt, have not been filed as exhibits to this Report because the total amount of securities authorized under any such instrument does not exceed 10% of our total assets on a consolidated basis. We agree to furnish to the SEC upon request a copy of any such instrument defining the rights of the holders of such long-term debt.



		Page
PART I. FINANCIAL INFORMATION
ITEM 1.	Condensed Consolidated Financial Statements (Unaudited)	1
ITEM 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	4836
ITEM 3.	Quantitative and Qualitative Disclosures About Market Risk	7761
ITEM 4.	Controls and Procedures	7861
PART II. OTHER INFORMATION
ITEM 1.	Legal Proceedings	7962
ITEM 1A.	Risk Factors	7962
ITEM 2.	Unregistered Sales of Equity Securities and Use of Proceeds	8362
ITEM 3.	Defaults Upon Senior Securities	8363
ITEM 5.	Other Information	8363
ITEM 6.	Exhibits	8363
SIGNATURE		8464
EXHIBIT INDEX		8565


	Mezzanine Equity
	Preferred Stock Shares	Preferred Stock Amount		Common Stock Shares	Common Stock Amount		Additional Paid-In Capital		Retained Earnings (Accumulated Deficit)(1)		Accumulated Other Comprehensive Income (Loss)		Treasury Stock Shares	Treasury Stock Amount		Stockholders' Equity Attributable to Hertz Global		Non- controlling Interests		Total Stockholders' Equity
Balance as of:
December 31, 2020	—	$	—	156	$	2	$	3,047	$	(2,681)	$	(212)	2	$	(100)	$	56	$	37	$	93
Net income (loss)	—	—		—	—		—		190		—		—	—		190		(1)		189
Other comprehensive income (loss)	—	—		—	—		—		—		17		—	—		17		—		17

Stock-based compensation charges	—	—		—	—		2		—		—		—	—		2		—		2
Distributions to noncontrolling interests	—	—		—	—		—		—		—		—	—		—		(11)		(11)
March 31, 2021	—	—		156	2		3,049		(2,491)		(195)		2	(100)		265		25		290
Net income (loss)	—	—		—	—		—		(168)		—		—	—		(168)		(1)		(169)
Other comprehensive income (loss)	—	—		—	—		—		—		(7)		—	—		(7)		—		(7)

Cancellation of common and treasury shares in exchange for new common shares	—	—		(142)	(2)		(98)		—		—		(2)	100		—		—		—
Cancellation of stock-based awards	—	—		—	—		(10)		—		—		—	—		(10)		—		(10)
Distributions to common stockholders	—	—		—	—		(239)		—		—		—	—		(239)		—		(239)
Contribution from Plan Sponsors	—	—		277	3		2,778		—		—		—	—		2,781		—		2,781
Rights Offering, net	—	—		180	2		1,796		—		—		—	—		1,798		—		1,798
Public Warrants issuance	—	—		—	—		(800)		—		—		—	—		(800)		—		(800)
Preferred stock issuance, net	2	1,433		—	—		—		—		—		—	—		—		—		—
Distributions to non-controlling interests, net	—	—		—	—		—		—		—		—	—		—		(5)		(5)

June 30, 2021	2	1,433		471	5		6,476		(2,659)		(202)		—	—		3,620		19		3,639
Net income (loss)	—	—		—	—		—		604		—		—	—		604		3		607
Other comprehensive income (loss)	—	—		—	—		—		—		(24)		—	—		(24)		—		(24)




Rights Offering, net	—	—		1	—		4		—		—		—	—		4		—		4
Exercise of Public Warrants	—	—		—	—		2		—		—		—	—		2		—		2
Distributions to noncontrolling interests	—	—		—	—		—		—		—		—	—		—		(10)		(10)


September 30, 2021	2	$	1,433	472	$	5	$	6,482	$	(2,055)	$	(226)	—	$	—	$	4,206	$	12	$	4,218



(In millions)	September 30, 2021		December 31, 2020
Revenue earning vehicles	$	9,751	$	7,492
Less accumulated depreciation	(1,526)		(1,467)
	8,225		6,025
Revenue earning vehicles held for sale, net(1)	338		37
Revenue earning vehicles, net	$	8,563	$	6,062



Facility	Weighted-Average Interest Rate as of September 30, 2021	Fixed or Floating Interest Rate	Maturity	September 30, 2021	December 31, 2020
Alternative Letter of Credit Facility(2)	N/A	N/A	N/A	—	114
Senior RCF Letter of Credit Facility	N/A	N/A	N/A	—	17

Unamortized Debt Issuance Costs and Net (Discount) Premium				—	(36)
Total Non-Vehicle Debt Subject to Compromise				—	4,443
Vehicle Debt
HVF III U.S. ABS Program
HVF III U.S. Vehicle Variable Funding Notes
HVF III Series 2021-A(3)	1.63%	Floating	06/2023	2,270	—

				2,270	—
HVF III U.S. Vehicle Medium Term Notes
HVF III Series 2021-1(3)	1.66%	Fixed	12/2024	2,000	—
HVF III Series 2021-2(3)	2.12%	Fixed	12/2026	2,000	—
				4,000	—
HVF II U.S. ABS Program
HVF II U.S. Vehicle Variable Funding Notes
HVF II Series 2013-A(4)	N/A	N/A	N/A	—	1,940
				—	1,940
HVF II U.S. Vehicle Medium Term Notes

HVF II Series 2015-3	N/A	N/A	N/A	—	163
HVF II Series 2016-2	N/A	N/A	N/A	—	263
HVF II Series 2016-4	N/A	N/A	N/A	—	187
HVF II Series 2017-1	N/A	N/A	N/A	—	199
HVF II Series 2017-2	N/A	N/A	N/A	—	164
HVF II Series 2018-1	N/A	N/A	N/A	—	468
HVF II Series 2018-2	N/A	N/A	N/A	—	94
HVF II Series 2018-3	N/A	N/A	N/A	—	95
HVF II Series 2019-1	N/A	N/A	N/A	—	330
HVF II Series 2019-2	N/A	N/A	N/A	—	354
HVF II Series 2019-3	N/A	N/A	N/A	—	352
				—	2,669













Vehicle Debt - Other

European Vehicle Notes(5)	N/A	N/A	N/A	—	888
European ABS(3)	2.50%	Floating	4/2022	401	263
Hertz Canadian Securitization(3)	2.44%	Floating	1/2023	206	53

Australian Securitization(3)	1.66%	Floating	4/2022	112	97
New Zealand RCF	3.13%	Floating	6/2022	37	35
U.K. Financing Facility	3.59%	Floating	10/2021-8/2024	111	105
U.K. Toyota Financing Facility	2.20%	Floating	10/2021-3/2022	13	—
Other Vehicle Debt	2.90%	Floating	10/2021-11/2024	91	37
				971	1,478



	Three Months Ended September 30,				Nine Months Ended September 30,
Redemption/Termination (in millions)	2021		2020		2021		2020
Non-Vehicle Debt
HIL Credit Agreement(1)	$	—	$	—	$	8	$	—
Second HIL Credit Agreement	—		—		5		—

Total Non-Vehicle Debt	—		—		13		—
Non-Vehicle Debt (subject to compromise)
Senior Term Loan	—		—		16		—
Senior RCF	—		—		22		—
Senior Notes	—		—		29		—
Senior Second Priority Secured Notes	—		—		4		—
Promissory Notes	—		—		2		—
Alternative Letter of Credit Facility	—		—		7		—

Letter of Credit Facility	—		—		8		—
Total Non-Vehicle Debt (subject to compromise)	—		—		88		—
Vehicle Debt
HVF II U.S. Vehicle Variable Funding Notes	—		—		9		—
HVF II U.S. Vehicle Medium Term Notes	—		—		39		—
HVIF Series 2020-1	—		—		21		—
European Vehicle Notes	—		—		29		—
European ABS(2)	—		2		—		5
Total Vehicle Debt	—		2		98		5
Total Loss on Extinguishment of Debt	$	—	$	2	$	199	$	5


(In millions)	Termination Benefits		Other		Total
Balance as of December 31, 2020(1)	$	—	$	—	$	—
Reclassified from liabilities subject to compromise	7		—		7
Charges incurred	19		4		23
Cash payments	(20)		—		(20)
Other non-cash reductions	—		(2)		(2)





Balance as of September 30, 2021	$	6	$	2	$	8


			Payments Due by Period
(In millions)	Total		2021		2022 to 2023		2024 to 2025		After 2025
Vehicles:
Debt obligation	$	7,241	$	34	$	3,186	$	2,021	$	2,000
Interest on debt(1)	434		35		236		120		43
Non-Vehicle:
Debt obligation	1,556		5		37		27		1,487
Interest on debt(1)	527		21		150		158		198
Total	$	9,758	$	95	$	3,609	$	2,326	$	3,728